Can I cool off from a NSW building contract?

By BuilderVet team. Last reviewed 2 November 2026.

Yes, if your NSW residential building contract is worth more than $20,000, you can generally cancel it within five clear business days after you are given a copy of the signed contract. You do this by written notice, and the builder must refund what you paid, except for reasonable out-of-pocket expenses and a reasonable price for any work already done.

This guide explains how the cooling-off period works, how to count the days, how to give notice, and the separate rules for door-to-door sales. It is general information, not legal advice. If a lot of money is involved, get legal advice quickly, because the window is short.

Which contracts have a cooling-off period?

The NSW Government says large jobs contracts, for residential building work valued at more than $20,000, must include a clear statement of the cooling-off period of five clear business days. The right comes from section 7BA of the Home Building Act 1989.

Small jobs contracts, for work from $5,000 to $20,000, don’t have this statutory cooling-off period. Our guide to NSW home building contract requirements explains the difference between the two contract types.

When does the five days start?

The NSW Government says the period is five clear business days after you are given a copy of the contract. “Clear” means you don’t count the day you receive the copy. Weekends and public holidays aren’t business days.

Separately, the builder must give you a copy of the signed contract within five business days after you sign. When counting that period, the NSW Government says weekends, NSW public holidays and 27 to 31 December don’t count.

In this example, we’d aim to have the notice delivered well before the end of Wednesday 11 November. Don’t leave it to the last afternoon. Counting rules can be technical, so if your deadline is close, check it with a lawyer.

How do I give notice?

Under section 7BA, the notice must be in writing and state that you rescind the contract. It can be given by:

• handing it personally to the contractor
• leaving it at the address shown in the contract
• serving it in a way the contract allows for notices

Practical tips:

• Keep it short: your name, the job address, the contract date, and a clear sentence that you rescind the contract under section 7BA of the Home Building Act 1989.
• Keep a copy and proof of delivery, such as a photo of it being left at the address or a delivery receipt.
• If the contract allows email notices, send it by email too, but check the contract’s notice clause first.

What happens to my deposit?

Once you rescind, the builder must refund money you have paid. They can keep reasonable out-of-pocket expenses they incurred before you rescinded, and a reasonable price for any work already done. Apart from that, you don’t incur liability for rescinding.

Remember the deposit cap. A builder can’t ask for more than 10% of the contract price as a deposit. And for jobs over $20,000, the NSW Government says not to pay the deposit until you’ve seen the home building compensation certificate and checked it’s valid. Our guide on verifying home building compensation insurance in NSW shows how.

What if a salesperson came to my door?

A different cooling-off right can apply to unsolicited consumer agreements under the Australian Consumer Law. The NSW Government says an agreement is unsolicited when a supplier approaches or phones you uninvited, negotiations happen away from their premises, and the total value is over $100 or not agreed. If you ask for a quote and the supplier then tries to negotiate a deal or later contacts you to negotiate, the resulting agreement may count as unsolicited.

For those agreements:

• you have 10 business days to cancel without penalty
• the supplier must not accept payment or supply services during that period
• you can cancel orally or in writing
• the period extends to 3 or 6 months if the salesperson breached certain rules
• it’s an offence for anyone to tell you to waive your cooling-off rights

Which rules apply to a building job sold this way can depend on the facts, so get advice if you’re unsure.

What if the cooling-off period has passed?

After the five days, you can’t use section 7BA. Your options then depend on the contract and the general law. Large jobs contracts must include a termination clause stating the contract may be terminated in circumstances allowed by the general law. Ending a contract without a legal basis can expose you to a damages claim, so get legal advice before you stop.

Checklist: using your cooling-off right

• Confirm the contract is over $20,000 and is for residential building work
• Note the date you were given a copy of the signed contract
• Count five clear business days, skipping weekends and public holidays
• Write a notice saying you rescind the contract under section 7BA
• Deliver it personally, leave it at the contract address, or serve it under the contract’s notice clause
• Keep a copy and proof of delivery
• Ask for a written refund statement showing any expenses or work charged
• If it was a door-to-door or phone sale, check the unsolicited agreement rules too

Worked example: second thoughts on a granny flat

Tom signs a $160,000 granny flat contract on a Monday and gets his copy the same day. On Wednesday, a friend points out the progress payments are tied to weeks, not stages. Tom is still inside the cooling-off period. He writes a one-paragraph notice rescinding under section 7BA, leaves it at the builder’s address listed in the contract, photographs it, and emails a copy. Because he followed the “check the insurance first” advice, he hadn’t paid a deposit yet, so there’s nothing to recover except any reasonable expenses the builder can show.

How BuilderVet helps

The cooling-off window is a good time to look harder at a builder. Run the free check on the entity named in your contract. For NSW builds, Build Watch watches your builder for 24 months for a one-off A$79 once you go ahead.

Frequently asked questions

How long is the cooling-off period on a NSW building contract?

Five clear business days after you’re given a copy of the signed contract, for residential building contracts worth more than $20,000.

Is there a cooling-off period for jobs under $20,000?

Not under section 7BA of the Home Building Act. Small jobs contracts don’t include one, although unsolicited sales rules may apply if a salesperson approached you.

Do I have to give a reason?

No. The notice just needs to be in writing and say you rescind the contract.

Can I cancel by phone?

Under section 7BA, the notice must be in writing. For unsolicited consumer agreements, you can cancel orally or in writing.

Will I get my deposit back?

Generally yes, less reasonable out-of-pocket expenses incurred before you rescinded and a reasonable price for any work done.

What counts as a business day?

Weekdays that aren’t public holidays. For the contract copy deadline, the NSW Government also excludes 27 to 31 December.

Sources

• NSW Government, Contracts for residential building work, https://www.nsw.gov.au/housing-and-construction/building-or-renovating-a-home/preparing/contracts (checked 2026-11-02)
• NSW Government, Guide to providing home building contracts, https://www.nsw.gov.au/housing-and-construction/compliance-and-regulation/your-obligations-to-your-customers/guide-to-providing-home-building-contracts (checked 2026-11-02)
• NSW Legislation, Home Building Act 1989 s 7BA, https://www.austlii.edu.au/au/legis/nsw/consol_act/hba1989128/s7ba.html (checked 2026-11-02)
• NSW Government, Unsolicited consumer agreements, https://www.nsw.gov.au/legal-and-justice/consumer-rights-and-protection/guarantees-contracts-and-warranties/unsolicited-consumer-agreements (checked 2026-11-02)

Last reviewed 2 Nov 2026