Cooling-off period in the ACT: how the 5 working days work

When you sign a contract to buy residential property in the ACT, you generally have a cooling-off period of 5 working days to change your mind. It is a statutory right under the Civil Law (Sale of Residential Property) Act 2003 (ACT), it does not apply at all to auctions or tenders, and it can only be shortened or waived if a lawyer signs you off on it. Here is exactly how it works, what it costs you if you use it, and when it simply is not available.

What the cooling-off period is

The cooling-off period is a statutory right, set out in the Civil Law (Sale of Residential Property) Act 2003 (ACT), that lets a residential property buyer withdraw from a signed contract for a small penalty and get back the rest of any money paid. In the ACT the buyer exercises this by giving the seller a "rescission notice" within the period.

It is not a chance to renegotiate the price, and it does not replace reading the required documents before you sign. It is a narrow exit window that closes once the 5 working days run out.

The 5 working days, explained

Under the Act, the cooling-off period begins the moment the contract is made and ends at 5pm on the 5th working day after that. Two details matter for working out your exact deadline:

• It counts working days, not calendar days. Weekends and ACT public holidays do not count, so the deadline moves further out around a long weekend.
• The clock starts on the day the contract is made, generally the day both parties have signed and exchange has happened, not a separate later date.

Because the exact final day and time depends on the calendar, always ask your solicitor to confirm it in writing rather than counting it yourself.

The penalty if you withdraw

If you use the cooling-off period to pull out, the seller is entitled to keep 0.25% of the purchase price, forfeited to the seller, and the rest of any money you paid must be returned to you.

• On a $600,000 purchase, the penalty is $1,500 (0.25% of $600,000).
• On a $800,000 purchase, the penalty is $2,000 (0.25% of $800,000).

Unlike Victoria's flat-dollar floor, the ACT's penalty is a straight percentage of price with no minimum, so it scales evenly however cheap or expensive the property is.

How to exercise the cooling-off period

You end the contract by giving the seller (or their agent) a written rescission notice before the 5 working days expire. Your solicitor typically prepares and serves this for you, which is one reason to have a solicitor engaged from the moment you sign, not only once you decide to withdraw.

When there is no cooling-off period

The cooling-off period does not exist at all in the following situations. If any of these describes your purchase, signing the contract commits you immediately, with no statutory window to change your mind:

• Corporate buyers: if the buyer is a corporation, there is no cooling-off period.
• Sales by tender: a property sold by tender carries no cooling-off period.
• Sales by auction: a property bought at public auction carries no cooling-off period.
• Passed-in auctions, same day: if the property was offered for sale by auction, passed in, and you then sign a contract that same day having been recorded as a bidder at the auction (or bidding for someone who was), there is no cooling-off period, even though the contract itself was not made at the auction.

Shortening or waiving it: the section 17 certificate

A buyer can agree to shorten or waive the cooling-off period, but the Act deliberately makes this hard to do by accident. A provision or agreement shortening the period only takes effect once you have received legal advice from a lawyer specifically about the effect of shortening it, that lawyer signs a certificate under section 17 of the Act, and you give a copy of that certificate to the seller. The period can also be extended, rather than shortened, by a written agreement between buyer and seller at any time before it would otherwise end.

The ACT versus New South Wales and Victoria

Cooling-off length and penalty are set jurisdiction by jurisdiction, and the ACT sits between NSW and Victoria on both measures:

• ACT: 5 working days, penalty of 0.25% of the purchase price, forfeited to the seller.
• New South Wales: 5 business days, penalty of 0.25% of the purchase price (the same length and rate as the ACT).
• Victoria: 3 clear business days, penalty of $100 or 0.2% of the purchase price, whichever is greater.

All three remove the cooling-off period entirely for auction purchases. If you are comparing jurisdictions, see our NSW cooling-off period guide, Victoria cooling-off period guide and the cooling-off period by state comparison, which sets out every state and territory side by side.

Practical tips for ACT buyers

• Engage your solicitor before you sign, not after. Five working days is not long to arrange finance and review the seller's required documents from scratch.
• Know your exact deadline. Ask your solicitor to confirm the final day and time in writing, allowing for weekends and public holidays.
• Remember auctions and tenders carry no cooling-off period. If you might bid or tender, complete all due diligence beforehand.
• Do not sign away your cooling-off rights casually. Waiving the period legally requires independent legal advice and a section 17 certificate; do not agree to shorten it without understanding exactly what you are giving up.

Conveyancing Explained provides general information about property transactions in Australia. It is not legal advice and does not create a client relationship. For advice on your situation, engage a licensed conveyancer, settlement agent, or property solicitor in your state or territory.