---
title: Cooling-Off Period in Victoria: Rules & Penalties | GNT Finance
description: How the 3 business day cooling-off period works when buying property in Victoria, when it doesn't apply, the $100 or 0.2% penalty and how it affects your loan.
url: https://gntfinance.com.au/legal/cooling-off-period-victoria/
section: legal
updated: 2026-09-01
author: Gorakh Timilsina, GNT Finance
---

# The cooling-off period when buying property in Victoria

**In short:** In Victoria you get 3 clear business days to cool off after signing a private-sale contract for residential property. You cancel by giving the vendor or their agent written notice inside that window. The vendor keeps $100 or 0.2% of the price, whichever is greater, and refunds the rest of your deposit. There is no cooling-off period for auction purchases.

The cooling-off period is the one legal escape hatch that costs almost nothing, so it pays to understand exactly when it applies, when it doesn't, and how to use it properly. Below is how the rule works under Victorian law, what it costs, and how it fits with your finance.

## What the law says

The cooling-off right sits in section 31 of the Sale of Land Act 1962 (Vic). It applies to a contract for the sale of land, which includes houses, units, townhouses and vacant residential lots, whenever the contract is signed by private sale rather than at auction.

The Act gives you the right to end the contract by written notice to the vendor or the vendor's estate agent within 3 clear business days after you sign. "Clear" means the day you sign doesn't count, and neither do weekends or Victorian public holidays. Sign on a Friday afternoon and your window runs Monday, Tuesday and Wednesday, expiring at the end of Wednesday.

The vendor is entitled to keep either $100 or 0.2% of the purchase price, whichever is more. Everything else you paid as a deposit must be returned to you.

The same section also lists when the right does not exist:

- the property was sold at a publicly advertised auction;
- the contract was signed within 3 clear business days before or after a publicly advertised auction for that property (so a "passed-in" negotiation signed on auction day, or a pre-auction offer accepted two days before, has no cooling-off);
- the land is used mainly for industrial or commercial purposes;
- the land is more than 20 hectares and used mainly for farming;
- you are an estate agent or a corporate body; or
- you previously signed a contract for the same land on substantially the same terms.

Your conveyancer or solicitor can issue a certificate waiving the right, but there is rarely a good reason for a buyer to give it up.

## How the cooling-off period works step by step

1. **Sign the contract.** The period starts on the day after you sign, not when the vendor countersigns. Most contracts in Melbourne are now signed electronically, and the date stamp matters.
2. **Count the days.** Three clear business days. Public holidays are excluded, and Consumer Affairs Victoria publishes the definition of a business day if you are near a holiday such as Melbourne Cup Day.
3. **Decide.** Use the days to get your contract and [Section 32 vendor statement](/legal/section-32-vendor-statement/) reviewed, run a building inspection if you didn't before signing, and confirm your finance position.
4. **Give notice in writing.** Email to the selling agent is fine in practice, but your conveyancer will normally send a formal notice to both the agent and the vendor's representative and keep proof of delivery. Notice must arrive before the period ends, not just be sent.
5. **Get your deposit back.** The agent returns the deposit less the statutory penalty. The vendor cannot deduct their own legal or marketing costs.

### Timelines and penalties

| Situation | Cooling-off available? | What you lose if you cancel |
|---|---|---|
| Private sale, signed Monday | Yes, until end of Thursday | $100 or 0.2% of price (greater) |
| Private sale, signed Friday | Yes, until end of Wednesday | $100 or 0.2% of price (greater) |
| Bought at auction | No | Full deposit at risk if you default |
| Signed within 3 business days before or after an advertised auction | No | Full deposit at risk if you default |
| Off-the-plan apartment by private sale | Yes | $100 or 0.2% of price (greater) |
| Commercial shop or warehouse | No | Whatever the contract says |

## Worked example

You sign a private-sale contract for a $650,000 house in Craigieburn on a Tuesday and pay a $65,000 deposit. Your cooling-off window runs Wednesday, Thursday and Friday.

On Thursday your building inspector finds active termite damage in the subfloor. You decide to walk away. Your conveyancer serves written notice on the agent on Friday morning.

The penalty is the greater of $100 or 0.2% of $650,000, which is $1,300. The agent refunds $63,700 of your deposit. Compare that with the position if you had bought the same house at auction: you would be legally bound, with the whole $65,000 exposed and the vendor able to sue you for any loss on resale.

## What it means for your home loan

The cooling-off period is short, and 3 business days is not enough time to get a home loan formally approved from scratch. That is why the sequence matters:

- Get [pre-approval](/guides/home-loan-pre-approval/) before you make an offer. Pre-approval tells you the lender is broadly comfortable with you as a borrower, so the only remaining hurdles after signing are the valuation and formal approval.
- Ask for a [subject-to-finance clause](/legal/subject-to-finance-clause/) in the contract as well. Cooling-off and finance clauses do different jobs. Cooling-off protects you for 3 days for any reason; a finance condition protects you for two or three weeks if the lender says no.
- If you are using the [First Home Guarantee](/guides/first-home-guarantee-5-percent-deposit/) or another scheme, confirm your eligibility and the property price cap before the cooling-off period expires, because a scheme knock-back after that point leaves you relying on the finance clause alone.
- Budget for the penalty as a possible upfront cost. Our [upfront costs calculator](/calculators/upfront-costs/) helps you see how it sits alongside stamp duty, conveyancing and lender fees.

Gorakh Timilsina spent years as a senior credit officer assessing applications, so GNT Finance can usually tell you within a day whether an application is likely to be approved and at what loan amount, which is exactly the information you need inside a 3-day window. Our home-loan service is at no cost to you in most cases.

## Common mistakes

- **Assuming cooling-off applies to auctions.** It never does, and it doesn't apply to contracts signed in the 3 business days either side of the auction date.
- **Counting the signing day.** The clock starts the next business day.
- **Phoning instead of writing.** A phone call to the agent is not valid notice. Put it in writing and keep evidence of when it was received.
- **Relying on cooling-off instead of a finance clause.** If your lender declines on day 10, cooling-off has long expired.
- **Believing legal advice removes the right.** Getting advice from your solicitor does not waive cooling-off. Only a formal waiver certificate does that.
- **Signing a fresh contract for the same property.** A second contract for the same land on substantially the same terms carries no new cooling-off period.

## Frequently asked questions

### Can I pull out of a house contract in Victoria after signing?

Yes, if you bought by private sale and you are still within 3 clear business days of signing. Give the vendor or their agent written notice and you forfeit only $100 or 0.2% of the price, whichever is greater. After the period ends, you can only exit under a condition in the contract, such as a finance or inspection clause, or by negotiating with the vendor.

### Is there a cooling-off period for auctions in Victoria?

No. Section 31 of the Sale of Land Act 1962 (Vic) excludes auction sales, and it also excludes any contract signed within 3 clear business days before or after a publicly advertised auction. If the property passes in and you sign that afternoon, you are bound immediately. Do your inspections, contract review and finance work before auction day.

### How much does it cost to cool off on a property in Victoria?

The vendor may keep $100 or 0.2% of the purchase price, whichever is greater. On a $500,000 purchase that is $1,000; on $720,000 it is $1,440. The balance of your deposit must be refunded. The vendor cannot add their own costs on top of the statutory amount.

### Does the cooling-off period apply to off-the-plan purchases?

Yes, when the contract is a private sale. Off-the-plan contracts have the same 3 clear business day cooling-off period as an established home. Off-the-plan contracts also have separate protections, including rules on sunset clauses and the maximum deposit. See our guide to [buying off the plan](/guides/buying-off-the-plan/) for the detail.

### What happens if I can't get finance after the cooling-off period ends?

If your contract has a subject-to-finance condition and the approval date hasn't passed, you can end the contract under that condition and get your deposit back. If the contract is unconditional, you are bound, and the vendor can keep your deposit and claim losses if you fail to settle. Our page on [what happens if finance falls through](/legal/what-happens-if-finance-falls-through/) covers your options.

## Talk to GNT Finance

Three business days is tight, so the best time to sort your finance is before you sign. GNT Finance can arrange pre-approval, explain what a lender will look for on your specific property, and help you settle on time. [Book a free consultation](/contact/) or call 0426 403 703.

*This page is general information only and not legal, tax or financial advice. Laws change — confirm current rules with the State Revenue Office, the ATO or a licensed professional.*