What Is a Cooling-Off Period?
A cooling-off period is a statutory right that allows a homeowner to cancel a residential building contract within a set number of days after signing, without giving a reason and without incurring significant penalties. This protection exists to prevent homeowners from being locked into major financial commitments through high-pressure sales tactics or hasty decisions.
How It Works
After signing a domestic building contract, the homeowner has a defined window — typically five business days — to reconsider the agreement. If they decide to withdraw, they must notify the builder in writing. The builder must refund any deposit paid, though in some states a small administrative fee may be retained.
The cooling-off period applies to most residential building contracts above certain value thresholds. It does not usually apply to:
- Contracts for emergency repairs
- Contracts where the homeowner has received independent legal advice and waived the cooling-off period in writing
- Very small jobs below the regulated contract threshold
State Variations
| State/Territory | Cooling-Off Period | Applies To |
|---|---|---|
| QLD | 5 business days | Domestic building contracts (QBCC regulated) |
| NSW | 5 business days | Residential building work over $20,000 |
| VIC | 5 business days | Domestic building contracts over $10,000 |
| WA | No statutory cooling-off | Governed by contract terms |
| SA | 5 business days | Domestic building work over $12,000 |
| TAS | Varies | Check contract and consumer law |
| ACT | 5 business days | Residential building contracts |
How It Relates to Licence Verification
Licensed builders are legally required to inform you of your cooling-off rights and include the relevant clause in the contract. An unlicensed builder may not provide a compliant contract and you could miss out on this important protection. Verifying your builder’s licence through TradieVerify before signing helps ensure you are dealing with a regulated professional who will honour your consumer rights.