Key takeaways
- Decide how you’ll own it: joint tenants hold equal shares that pass automatically to the survivors; tenants in common can hold unequal shares that pass under each owner’s will.
- Everyone on a joint home loan is responsible for the whole debt, not just their share of the property.
- Put a written co-ownership agreement in place, with independent legal advice for each person.
- A NSW first home buyer can still get the transfer duty exemption or concession when buying with a relative, if the first home buyers take at least 50%.
- Check land tax, capital gains tax and future borrowing before a parent goes on the title.
Buying property with family can get you into the market years sooner. Pooling deposits and incomes with parents, siblings or adult children lifts what you can borrow. It also ties your finances together for a long time, so the ownership structure and the paperwork matter as much as the loan.
Three ways families buy together
Most family purchases take one of three shapes, and each carries a different level of risk for each person.
| Option | On the title? | On the loan? | Main risk |
|---|---|---|---|
| Buying together (co-owning) | Yes, every owner | Usually, as joint borrowers | Each borrower is liable for the whole loan |
| Family guarantee | No, only the buyer | No, but the guarantor’s property secures part of it | The guarantor may have to pay if you can’t |
| Gifted deposit | No, only the buyer | No | Family fallout if it was really meant as a loan |
This article focuses on co-owning. For how guarantees, gifts and equity release work as loan products, read our guide to financing options for family property purchases in NSW.
Joint tenants or tenants in common?
When two or more people buy together, the title records how you own the property. There are two choices.
Joint tenants
Joint tenants own the property together in equal shares. If one owner dies, the survivors have a right of survivorship: the deceased owner’s interest passes to them automatically and isn’t part of their estate. It suits couples who want everything to go to each other.
Tenants in common
Tenants in common each own a separate percentage, which can be unequal, such as 60/40 when one person contributes more. When an owner dies, their share becomes part of their estate and passes under their will. A tenant in common can also sell, mortgage or lease their share without the others agreeing, which is one more reason to have a written agreement.
When contributions differ, tenants in common lets the shares reflect them. Decide before exchange and tell your conveyancer, and update your wills to match.
Put a co-ownership agreement in writing
Moneysmart’s advice is to agree on ownership, costs and future decisions before you buy together, and to consider a legal agreement. A solicitor can draft one. It should cover:
- Who put in what, and each person’s share of the property
- Who pays the repayments, council rates, insurance, strata levies and repairs
- Who lives there, and whether they pay rent to the others
- What happens if someone can’t pay their part
- How a person can sell out: notice period, valuation method and who gets first right to buy
- What happens on a death, a separation or a new partner moving in
- How you’ll resolve disputes before anyone goes to court
Each person should get independent legal advice, especially a parent contributing a large sum. It protects everyone, including the relationship.
Buying with family?
Phillip can show you how lenders will assess each person, and which structure fits, before anyone signs.
The loan: everyone is responsible for all of it
If you’re all borrowers on one home loan, each of you is responsible for the whole debt, not only your share of the property. If one person stops paying, the others must pay the full amount.
Lenders assess every borrower’s income, debts and living costs. The whole loan then shows up when each borrower applies for credit later, which can limit a sibling’s or parent’s ability to buy their own place.
A parent who doesn’t want to be on the title can act as a guarantor instead. That limits their involvement, but their property is still at risk if the loan isn’t repaid.
First home buyer concessions when you buy with family
Buying with a parent doesn’t automatically cost you the NSW first home buyer duty savings. Under the First Home Buyers Assistance Scheme, a buyer who isn’t a first home buyer can join you as an equity partner if:
- the first home buyers acquire at least 50% of the property between them
- the equity partner isn’t the spouse or de facto partner of a first home buyer
- you’re buying the whole property, not a share of a home your parents already own
- you meet the scheme’s other eligibility and residence rules.
Example: buying with a parent
For example, say a first home buyer and her father buy a $750,000 existing home in equal shares. Her half qualifies because the price is under the $800,000 exemption threshold. Her father pays half the transfer duty calculated on the full $750,000: about $13,969 at 2026–27 rates. If his share were 5% or less, the whole purchase could qualify.
Read more in our guide to stamp duty exemptions for first home buyers in NSW. For federal help, the Australian Government 5% Deposit Scheme lets two people apply together, including family members, but both must meet the criteria. Our First Home Guarantee guide explains how.
Tax and land tax traps for parents
Co-owning changes the tax picture, mostly for the owner who doesn’t live there.
- Capital gains tax. The main residence exemption applies to a home you live in. A parent who co-owns their child’s home but lives elsewhere may pay capital gains tax on their share when it’s sold.
- Land tax. From the 2026 land tax year, the NSW principal place of residence exemption requires the people living in the home to own at least 25% of it between them. If a parent owns 80% and the child who lives there owns 20%, the exemption won’t apply and land tax may be payable.
- Future borrowing. The shared home and loan appear in every owner’s future loan applications.
Get advice from an accountant before you sign the contract.
When circumstances change
People marry, move interstate or want their money back. Plan the exit before you buy.
Buy out the other owner
One owner takes over the other’s share, usually by refinancing into their own name, and the lender must approve them on their own income. Transfers between relatives need a valuation, and duty may apply to the share transferred.
Sell and split the proceeds
Sell the property and divide what’s left after the loan and costs according to your shares.
If you can’t agree
A co-owner can ask the NSW Supreme Court to appoint trustees to sell the property. It’s slow and expensive, which is the best argument for a clear agreement at the start.
If you need to refinance to buy out a family member, see how refinancing your home loan works. Buying your first home with family? Start with our first home buyer page.
Frequently asked questions
Possibly. Under the First Home Buyers Assistance Scheme, a relative who isn’t a first home buyer can buy with you as an equity partner if the first home buyers take at least 50% of the property. Your parent pays transfer duty on their share. If their share is 5% or less, the whole purchase can qualify. A spouse can’t be an equity partner.
Joint tenants own the property together in equal shares. If one dies, their interest passes automatically to the surviving owners, whatever their will says. Tenants in common each own a set share, which can be unequal, such as 70/30. When one dies, their share becomes part of their estate and passes under their will.
Yes, lenders can accept co-borrowers who aren’t a couple. The lender assesses everyone’s income, debts and expenses. Each of you is responsible for the whole loan, so if one person stops paying, the others must cover the full repayments. The loan also counts against each of you when you apply for credit later.
It’s strongly recommended. A solicitor can draft an agreement covering contributions, shares, costs, selling and what happens if someone dies, separates or can’t pay. Each owner should get independent legal advice, particularly a parent or anyone putting in more money, so everyone understands their rights and obligations before settlement.
Your co-ownership agreement should set the process, such as a buyout at an independent valuation. Buying someone out usually means refinancing, and the transfer of their share may attract duty. If owners can’t agree, a co-owner can ask the NSW Supreme Court to appoint trustees to sell the property, which is slow and costly.
Sources
- ATO: Co-ownership and right of survivorship (opens in a new tab)
- Revenue NSW: First Home Buyers Assistance Scheme guide, equity partners (opens in a new tab)
- Revenue NSW: Land tax principal place of residence exemption (opens in a new tab)
- ATO: Eligibility for main residence exemption (opens in a new tab)
- Moneysmart: Ways to buy a home sooner (opens in a new tab)
- Moneysmart: Relationships and money (shared loans) (opens in a new tab)
This article is general information only and doesn't take your objectives, financial situation or needs into account. Figures and eligibility rules change; check the official sources above or talk to us before you act. Keystone Home Loans Pty Ltd ATF BEMA Family Trust, Credit Representative Number 564704 is authorised under Australian Credit Licence Number 384704.
Written by
Phillip Bui
Founder and Principal Mortgage Broker at Keystone Home Loans, based in Arncliffe, NSW. Accredited Mortgage Broker and Full Member of the Mortgage & Finance Association of Australia (MFAA).
