Is there a cooling-off period on an off-the-plan contract?

Usually, yes, but it is short. In Victoria you have three clear business days after signing, and the developer can keep $100 or 0.2% of the price, whichever is more. In NSW an off-the-plan buyer has 10 business days and forfeits 0.25% of the price. In Queensland it is five business days, with up to 0.25% kept.

How does cooling-off work in Victoria?

Section 31 of the Sale of Land Act 1962 lets a buyer end a contract for the sale of land by giving notice within three clear business days after signing. The day you sign doesn't count, and nor do weekends or public holidays. The notice must be signed by you and given to the vendor, the vendor's agent or the estate agent selling the property, or left at one of their addresses given in the contract.

If you cool off, you get back everything you've paid except $100 or 0.2% of the price, whichever is greater. On a $650,000 apartment that's $1,300. A contract term that tries to exclude or limit this right has no effect.

When is there no cooling-off in Victoria?

• The sale is at a publicly advertised auction, or within three clear business days before or after one.
• The land is used mainly for industrial or commercial purposes, or is more than 20 hectares and used mainly for farming.
• You previously signed a contract for the same land on substantially the same terms.
• The buyer is an estate agent or a company.

The last point catches people who buy through a company, including a trust or super fund with a corporate trustee. If that's you, get advice before you sign, because there's no second chance.

What about NSW?

A buyer of an existing home in NSW usually has five business days. An off-the-plan buyer has 10 business days, because these contracts are long and complex. If you rescind in that time you forfeit 0.25% of the price, which is $250 for every $100,000.

There's no cooling-off if you buy at auction, or exchange on the day of the auction after the property is passed in. The period can also be waived: your solicitor or conveyancer gives the vendor a section 66W certificate after explaining the contract to you. Developers sometimes ask for one. Don't agree until the contract has been reviewed.

And Queensland?

Queensland's cooling-off rules are in the Property Occupations Act 2014. The period is five business days. It starts on the day you receive a copy of the contract signed by both parties, and ends at 5pm on the fifth business day. To end the contract you give the seller a signed notice. The seller can deduct up to 0.25% of the price from your deposit and must refund the rest within 14 days.

There's no cooling-off for a sale at auction, for a contract signed with a registered bidder by 5pm on the second clear business day after the property was passed in, or when the buyer buys three or more lots at the same time. You can waive or shorten the period by written notice to the seller, so read everything you're asked to sign with the contract.

Is cooling-off the only way out?

No, but it's the simplest. Once it ends, you can only end an off-the-plan contract on a ground that the law or the contract gives you, such as a missed sunset date, a failure to disclose, or a change to the plan that materially affects your lot. We cover those in when a buyer can terminate an off-the-plan contract and in our guide to changes to the plans.

Use the time well

Three to ten business days goes quickly. The best time for a contract review is before you sign, when you can still negotiate the sunset date, the deposit and the developer's right to make changes. If you've already signed, send us the contract straight away. We'll tell you whether you're still within the cooling-off period and whether to use it.