Buying property together: joint tenants vs tenants in common and 4 more things to know

Buying with a partner, sibling, parent or friend can boost your deposit and borrowing power. Sort out ownership, liability and an exit plan before you sign.

Before you buy property with someone else, decide whether you’ll hold the title as joint tenants or tenants in common, understand that each borrower is liable for the whole loan, agree on what happens if one of you wants to sell, and put a co-ownership agreement in place before settlement.

With property prices remaining high across most of Australia, co-purchasing has become an increasingly practical path into property ownership. Buying with a partner, family member or friend can give you a larger deposit and greater borrowing power than either of you could achieve alone.

But co-ownership is a significant financial and legal commitment. The arrangement works better when everyone involved understands the key considerations before they sign anything. Work through these five points first.

1. Joint tenants vs tenants in common: what’s the difference?

There are two ways to hold property with another person in Australia, and the choice affects what happens to your share if you die, how much of the property you own, and how any rental income is split.

Joint tenants own the property equally. If one owner dies, their share automatically passes to the surviving owner regardless of what their will says. This is called the right of survivorship.

Tenants in common each own a defined share of the property, which can be equal or unequal. That share forms part of each owner’s estate and passes according to their will. If you put in 70% of the deposit and your sibling put in 30%, the title can record a 70/30 split.

Couples commonly choose joint tenancy, while friends or family co-purchasers often opt for tenants in common to reflect their individual contributions.

If you’re buying an investment property together, the ATO splits rental income and deductions according to each owner’s legal interest in the property. A 50/50 joint tenancy means a 50/50 split, even if one person pays more of the costs. Talk to your accountant about which structure suits your tax position before you sign the contract, because the ownership structure is recorded on the transfer at settlement.

2. How lenders assess a joint home loan

When two or more people apply for a home loan together, lenders assess the combined income, expenses, debts and credit history of all applicants. This can increase borrowing capacity compared to applying alone, but it also means that any issues on one applicant’s credit file or financial position affect the entire application.

Each borrower is jointly liable for the full loan. If one party stops making repayments, the other is responsible for the full debt. Lawyers call this “joint and several” liability, and it applies whether you own the property 50/50 or 90/10.

A few points tend to catch co-buyers out:

• Lenders count each applicant’s credit card limits, car loans, personal loans and buy now, pay later accounts as commitments, even if the other borrower has none. Our guide to what affects your borrowing capacity besides income explains how this works.
• Living expenses are assessed for the whole household. If one co-buyer has dependants, the lender’s expense benchmark rises for the joint application.
• A default, missed payments or a large number of recent credit enquiries on one person’s file can limit your lender choice for both of you.

If you’re buying your first home together, government schemes may help. Since July 2023, the Home Guarantee Scheme has allowed joint applications from friends, siblings and other family members, not just married or de facto couples, provided each applicant meets the eligibility criteria. See how the expanded Home Guarantee Scheme works for first home buyers, or speak to a broker about first home buyer loans.

3. What happens if one co-owner wants to sell?

This is one of the most common sources of tension in co-ownership arrangements, so plan for it before it becomes an issue. If one owner wants to sell and the other does not, the options typically include:

• One party buying out the other. The remaining owner usually needs to refinance the loan in their own name, which means qualifying for the full debt on their income alone. A home loan refinance can remove the departing owner from the loan, subject to the lender’s assessment.
• Agreeing to sell the property jointly and splitting the proceeds after the loan and selling costs are paid.
• Applying to a court or tribunal to force a sale. In Victoria, the Victorian Civil and Administrative Tribunal (VCAT) can hear disputes between co-owners of land and order a sale or division of the property.

Having a co-ownership agreement prepared by a solicitor before settlement, setting out what happens in these circumstances, can prevent a difficult personal situation from becoming an expensive legal dispute.

4. Each party’s financial position affects the other

Co-ownership creates an ongoing financial link between the parties that extends well beyond the initial purchase. If one co-owner falls into financial difficulty, misses repayments or has other debts called in, it can affect the shared property and the other owner’s credit position.

Ask yourselves how the arrangement would hold up if:

• one of you lost your job or took extended leave
• one of you wanted to start a family, move interstate or buy your own home
• one of you became seriously ill or died
• your relationship broke down

Couples can work through these questions with our list of conversations to have before getting a home loan. The same questions apply to friends and family buying together.

5. What should a co-ownership agreement include?

A co-ownership agreement is a private contract between the owners. It doesn’t bind the lender, but it records what you’ve agreed so there is less to argue about later. A solicitor will tailor it to your situation. Common inclusions are:

• how much each person contributed to the deposit and purchase costs
• each owner’s percentage share, if you’re tenants in common
• who pays what share of the repayments, rates, insurance, maintenance and strata fees
• what happens if one owner can’t pay their share
• how and when either owner can exit, and how the property will be valued for a buyout
• what happens if an owner dies or becomes unable to manage their affairs
• how disputes will be resolved before anyone goes to court or VCAT

Get legal and financial advice before you commit

Co-purchasing works well for many people. The arrangements that tend to go smoothly are the ones where both parties have taken independent legal advice and put a co-ownership agreement in place before settlement. Each owner getting separate legal advice matters most when contributions are unequal or when one party is a parent helping an adult child.

On the finance side, lenders differ in how they treat joint applications, guarantors and unequal ownership. If you’re getting ready to apply, our guide on how to get mortgage ready in 2026 is a good place to start. A broker can compare joint home loan options across a panel of lenders and explain how each lender would assess your combined position. Attain Loans is a mortgage broker in Melbourne’s west that helps co-buyers, couples and families compare their options, subject to each lender’s assessment.

This article is general information only and doesn’t take into account your objectives, financial situation or needs. Consider whether it’s appropriate for you and speak with a licensed professional, including a solicitor and accountant, before making a decision.

Further questions

This is general information only and is subject to change at any given time. Your complete financial situation will need to be assessed before acceptance of any proposal or product.