Buying property with someone you are not married to or in a de facto relationship with is more common than it used to be, and more complicated than most buyers realise before they start.
Friends who want to get into the market together. Siblings combining resources to buy a family investment. Adult children purchasing alongside a parent. The motivations are sound. The legal and financial structures that support them require careful thought before anyone signs anything.
The deposit barrier has always been easier to clear with two incomes than one. As Sydney and Melbourne prices have moved further from what a single income can realistically support, the logic of combining resources with a trusted partner has become more compelling.
Two people on $80,000 each have a combined income of $160,000 and combined savings capacity that makes a deposit achievable in a timeframe that feels manageable. The same two people buying separately are both looking at extended timelines and higher LMI costs.
The maths work. The complications arise in the legal structure, the exit strategy, and the relationship management that most co-purchasers do not plan for adequately before they commit.
When two people buy property together in Australia, the ownership structure is the first and most consequential decision.
Joint tenants means both owners hold the property equally and indivisibly. Neither party owns a specific share, they own the whole property together. The critical implication is the right of survivorship: if one joint tenant dies, their interest automatically passes to the surviving owner regardless of what their Will says. The deceased's share cannot be left to anyone else.
Joint tenancy is common between spouses and de facto partners because the right of survivorship aligns with what most couples want. It is less appropriate for friends or siblings who may have different intentions for what happens to their share if they die.
Tenants in common means each owner holds a defined share of the property. Those shares do not have to be equal, one person might hold 60% and the other 40%, reflecting their respective contributions to the deposit and ongoing costs. Each owner can deal with their share independently: they can sell it, mortgage it, or leave it to whoever they choose in their Will.
For friends and siblings buying together, tenants in common is almost always the more appropriate structure. It preserves each person's right to deal with their own share and ensures that ownership reflects the actual financial contributions each party makes.
A co-ownership agreement, sometimes called a property sharing agreement, is a legally binding document that sets out how the co-owners will manage the property, their financial obligations, and what happens in specific scenarios.
Every co-purchase between non-spouses should have one. The scenarios it needs to address include:
What happens if one person wants to sell and the other does not? This is the most common source of conflict in co-ownership arrangements. The agreement needs to set out a clear process -- a right of first refusal for the remaining owner, a timeline for resolution, and what happens if agreement cannot be reached.
What happens if one person cannot meet their financial obligations? Job loss, illness, relationship breakdown, or unexpected expenses can affect one owner's ability to contribute to the mortgage, rates, and maintenance. The agreement needs to address how shortfalls are handled and what the consequences are if they persist.
How are decisions about the property made? Renovations, tenants, sale timing, refinancing -- any decision affecting the property should have a clear decision-making process in the agreement. Equal ownership without a decision-making framework creates deadlock risk.
What happens if one owner dies? Particularly important for tenants in common arrangements where the deceased's share passes according to their Will rather than automatically to the co-owner.
How are ongoing costs split? Mortgage repayments, rates, strata levies, insurance, maintenance, and property management fees all need to be clearly allocated.
A solicitor should draft the co-ownership agreement. The cost is modest relative to the asset being purchased and the disputes it can prevent.
Joint and several liability. When two people take a joint mortgage, both are individually and jointly responsible for the entire debt. If one person stops making repayments, the lender can pursue the other for the full outstanding balance. This is not a risk that is limited to the defaulting person's share of the property.
Borrowing capacity is assessed on both incomes. The combined income typically increases borrowing capacity relative to individual applications. But both parties' credit histories, existing debts, and financial behaviours are assessed. One co-purchaser's poor credit history or significant existing debt can affect the joint application.
Both parties need to be comfortable with each other's financial situation. Before committing to a joint mortgage, each party should understand the other's income stability, existing debts, credit history, and financial habits. Discovering a co-purchaser has significant undisclosed debt after settlement is a situation that a co-ownership agreement cannot fully protect against.
Exit financing. When one co-owner wants to exit, selling their share to the other or to a third party, the remaining owner needs to be able to finance the buyout. Whether that is achievable depends on their individual financial position at the time of exit, which may be years away. Building in a realistic assessment of each party's likely future borrowing capacity is part of responsible co-purchase planning.
If both co-purchasers are first home buyers, both may be eligible for first home buyer grants and stamp duty concessions depending on the state. If one has previously owned property, that can affect the other's eligibility depending on the state's rules.
In NSW, both applicants must meet the eligibility criteria for the First Home Buyers Assistance Scheme. If one co-purchaser has previously owned property, neither party may be eligible for the stamp duty concession.
In Queensland and Victoria, the rules are similar but the specific eligibility tests vary. Getting advice specific to your state before structuring the purchase is essential.
For co-purchasers targeting off the plan properties, Coposit's deposit instalment structure can work well for jointly held purchases. The $10,000 upfront payment can be contributed jointly, and the weekly instalments can be split between the two parties according to their agreed ownership share.
The co-ownership agreement should address how weekly instalment obligations are split and what happens if one party cannot meet their contribution during the construction period.
For renters who are co-purchasing as a strategy to get into the market, Unrent by Coposit is also worth understanding, a model where weekly rent accumulates toward a deposit rather than building a landlord's equity. Find out if Unrent by Coposit is suitable for you.
Browse current off the plan listings on the Coposit projects page, download the Coposit app, or contact the Coposit team to understand which projects and deposit structures work for co-purchasers.
This article is general information only and does not constitute legal or financial advice. Co-ownership structures and first home buyer eligibility vary by state and individual circumstance. Always seek independent legal and financial advice before entering into any co-ownership arrangement.
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