Cooling-off in Victoria: What this means for purchasers and vendors

You’ve signed a contract to purchase a property in Victoria, what happens if you change your mind?

A cooling off period applies to protect purchasers who get cold feet on the purchase, shortly after signing.  The three clear business day cooling-off period gives purchasers the chance to walk away without a reason, but it comes with strict rules, time limits, and financial consequences.

What is the cooling-off period?

In most private sales, purchasers have a three clear business day window after the purchaser signs the Contract of Sale to cancel the contract.

No reason is required but a financial penalty applies.

• Penalty: 0.2% of the purchase price is forfeited from the deposit paid to the vendor. $100 applies if the 0.2% is a lesser figure.

• Notice: Must be in writing and served before the deadline

• Timing: Starts the day after (clear) the purchaser signs and excludes weekends and public holidays (business days only).

 

for an exchanged contract if they have cold feet. Until the contract is exchanged, the purchaser may withdraw their offer without penalty.

Sometimes, by the time a contract is signed by all parties and exchanged the cooling off period is well under-way or close to expiry.

When will the cooling-off period NOT apply?

This legal right doesn’t apply for:

• Properties purchased at auction
• Contracts signed within three business days before or after an advertised auction
• Purchases by corporate entities or estate agents
• Contracts re-signed on substantially the same terms
• Land used primarily for industrial or commercial purposes; and
• Land used primarily for farming which is 20+ hectares

The cooling-off period right can’t be contracted out. There should be a Notice within the contract stating your rights (for residential land) and if this Notice is missing from your contract, you may have grounds to rescind.

Purchasers: Your cooling off safety net (with a catch)

The cooling-off period gives you an exit, for a short period of time, but it’s not a “free pass.

✔ Where it applies, you can use the period for any reason, such as:

✘ You can’t rely on a cooling off period:

Always check with us before assuming you’re covered.

For Vendors: Don’t consider the deal done too soon

Until the cooling-off period ends, the purchaser can rescind, which can be understandably disappointing.

Within the cooling off period, you shouldn’t:

If the purchaser rescinds correctly, you must refund the deposit paid (minus 0.2% of the purchase price).

The legal 'grey area: 5pm or Midnight?

For peace of mind and to avoid disputes:

• Purchasers should act well before 5pm

• Vendors should assume the right lasts until midnight

Key take-away:

The Victorian cooling-off period is a powerful protection, but it’s also misunderstood. It’s time-limited, conditional, and must be used correctly to be effective. Whether you’re thinking of withdrawing or responding to a purchaser who is, we’ll guide you through it with confidence and clarity.

Need advice on cooling off? Contact us immediately—because when it comes to timing, every hour counts.

The information is general in nature and does not constitute legal advice. If you are buying or selling, please contact us to request legal advice.