What is the cooling-off period for NSW property purchases?
In NSW, residential property purchasers have a five business day cooling-off period after exchanging contracts. During this period, the purchaser can rescind the contract by giving written notice, but forfeits 0.25% of the purchase price to the vendor. The cooling-off period is set by section 66 of the Conveyancing Act 1919 (NSW). It does not apply to properties sold at auction, or where a section 66W certificate is provided.
How the cooling-off period works
The five business day period starts from the date of exchange, not the date the purchaser signs. To rescind, the purchaser (or their solicitor) must give written notice to the vendor's solicitor before 5pm on the last business day. On rescission, the purchaser forfeits 0.25% of the purchase price (e.g., $2,500 on a $1 million property). The balance of any deposit is refunded.
When cooling-off does not apply
No cooling-off period applies where: the property is sold at auction or within three days after being passed in at auction; a section 66W certificate is issued by the purchaser's solicitor; or the purchaser is another corporation, not a natural person. The absence of cooling-off at auction is why pre-auction legal review is critical.
Section 66W certificates
A section 66W certificate is a certificate issued by the purchaser's solicitor or conveyancer waiving the cooling-off period. Vendors often request a 66W certificate before exchange to provide certainty. The solicitor issuing the certificate must have reviewed the contract and advised the purchaser — it carries professional responsibility. I help solicitors prepare and track 66W certificates as part of the exchange workflow.
Common issues
- The 0.25% forfeiture is non-negotiable — it applies automatically on rescission during cooling-off
- Auction purchases have no cooling-off period at all — legal review must happen before bidding
- A 66W certificate should only be issued after genuine review and advice — it is a professional obligation
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