Buying property with someone else: parents, family or friends

Yes. Buying a property with your parents is possible in Australia, provided you meet your lender's eligibility criteria and agree on how the purchase will be structured.

Parents can help you buy a home in several ways. They may purchase the property with you as co-owners, act as guarantors, gift or lend you money towards the deposit, or contribute to the purchase costs. Some arrangements involve shared ownership, while others simply provide financial support without giving your parents a legal ownership interest in the property.

Parents aren't the only people you can buy a property with. Depending on your circumstances, you may also be able to purchase a home with:

• A sibling
• Another family member
• A friend
• An investment partner

While the buying process is generally the same, the ownership structure, financial setup, and legal responsibilities can vary based on who you buy with. Understanding everyone’s rights and obligations before signing a contract can help avoid surprises down the track.

Parents don't necessarily need to become co-owners to help you buy a property. Depending on your circumstances, they can support your home purchase in different ways, from contributing to your deposit to buying the property with you.

One option is to buy the property jointly with your parents. In this arrangement, you and your parents purchase the property together and may both be listed on the home loan, the property title or both, depending on how the purchase is structured.

Buying together may increase your borrowing power or help you enter the property market sooner if you can't qualify for a home loan on your own. However, it also means everyone involved should understand their ownership rights, financial responsibilities and what happens if circumstances change.

Instead of becoming a co-owner, your parents may be able to act as guarantors for your home loan. A guarantor uses the equity in their own property as additional security for part of your loan, which may help you qualify for a home loan or avoid paying lenders mortgage insurance (LMI), depending on your lender and loan amount.

Unlike a joint purchase, guarantors don't own a share of the property unless they're also listed on the title. It's important that your parents get independent legal advice before they decide to guarantee your loan.

Parents may also choose to gift money towards your home deposit or purchase costs. A larger deposit may reduce the amount you need to borrow and could improve your chances of loan approval.

Some lenders may ask you to provide a statutory declaration or gift letter confirming the money doesn't need to be repaid.

Rather than giving you the money outright, your parents may choose to lend you part of the deposit. In this case, it's generally a good idea to document the loan amount, repayment terms and any interest payable to avoid misunderstandings later.

Yes, co-buying can impact your government entitlements in two key ways:

• First Home Owner Grant: Anyone listed on the property title is considered a co-applicant. To qualify for the grant, every co-applicant must meet the eligibility rules, including the requirement to have never owned residential property. If your parent or friend has owned a home before, the application will typically be rejected, even if you are a first home buyer.
• Stamp Duty Concessions: Rules for transfer duty discounts vary across each state and territory. In some states and territories, having a non-first home buyer on the title can reduce or eliminate your concession.

Contacting your state’s revenue office before making a purchase can help you understand your specific eligibility.

In Australia, there are two main ways to own a property together: joint tenants and tenants in common.

If you buy as joint tenants, everyone owns the property equally, even if one person contributes more towards the purchase.

For example, if you and your parents buy a home together as joint tenants, you'll each have an equal ownership interest in the property. If one owner dies, their share automatically passes to the surviving owner or owners.

This ownership structure is commonly used by couples, but it can also be used by parents and children who want equal ownership.

If you buy as tenants in common, each person owns a defined share of the property. That share can be equal or unequal.

For example, if you contribute 70% of the purchase price and your parents contribute 30%, you could own the property in those proportions. If one owner dies, their share forms part of their estate rather than automatically passing to the other owners.

This ownership structure is often used when buying with parents, siblings or friends, particularly where each person contributes a different amount.

Buying a property with your parents, family members or friends can help you get into the property market sooner. However, before signing a contract, it's important that everyone understands how the arrangement will work.

Discussing these questions upfront can help set clear expectations and reduce the risk of misunderstandings later.

Start by deciding how the property will be used.

Will everyone live in the home, or will one owner live there while the others treat their share as an investment? If the property is an investment, who will manage the tenants and rental income? It's also worth discussing what happens if your plans change in the future, such as one owner moving out or wanting to move into the property.

Buying a property involves more than just contributing towards the deposit. Before purchasing together, agree on how you'll share both the upfront and ongoing costs.

These may include:

• The deposit
• Stamp duty and other government charges
• Conveyancing and legal fees
• Building and pest inspections
• Home loan repayments
• Council rates
• Strata levies (if applicable)
• Home and contents insurance
• Repairs and maintenance

If one owner contributes more towards the purchase or ongoing costs, you should also consider whether the ownership structure reflects those contributions.

Circumstances can change. One owner may want to move interstate, buy another property or simply exit the arrangement.

How this works in practice can depend on how the property is owned.

Example: Joint tenants

Sarah and James buy a home as joint tenants. A few years later, they separate and decide to go their own ways. Rather than selling a defined 50% share of the property, they would typically either agree for one person to buy out the other's interest by refinancing the home loan, or sell the property and divide the proceeds.

Example: Tenants in common

Two friends buy an investment property as tenants in common, with one owning 70% and the other 30%. If the 70% owner wants to exit, they have a defined ownership share. In practice, the remaining owner may buy that share, or both owners may agree to sell the property. While a tenant in common can generally sell or transfer their interest, finding a buyer for part of a residential property can be difficult.

Before buying together, it's worth discussing questions such as:

• Will the remaining owner or owners have the first opportunity to buy the departing owner's share?
• If not, will the property be sold?
• How will the sale proceeds be divided?
• How will disagreements be resolved?

If more than one person is named on the home loan, each borrower is generally responsible for ensuring the loan is repaid. If one owner experiences financial hardship, the remaining borrowers may still be responsible for meeting the repayments.

Before buying together, discuss how you would manage a temporary or long-term change in someone's financial circumstances and whether you'll record these arrangements in writing.

Yes. Putting an agreement in writing before settling on a property can help co-buyers set clear rules early and avoid potential disputes down the track.

A co-ownership agreement, usually drawn up by a solicitor, is a legal document outlining how the property setup works in practice. It generally covers:

• Ownership shares: Each person's percentage of the property and how it was calculated.
• Ongoing expenses: How mortgage repayments, council rates, insurance, and maintenance costs are split.
• Exit strategies: What happens if one owner wants to sell, move out, or can no longer afford their repayments.
• Buyout options: Whether remaining owners get the first option to buy out a departing co-owner, and how that share is valued.
• Dispute resolution: Formal steps for resolving conflicts if owners can't reach an agreement.

Some lenders may also require you to provide a co-ownership agreement as part of the home loan application, especially when unrelated buyers apply together.