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Should I buy with someone else?
The most common way to buy a property with
two or more people who aren’t married or in
a de-facto relationship is through a tenants-
in-common arrangement. This allows the
property ownership to be split any way - not
necessarily into equal shares. Three people
can buy a third each or it can be divided in
other proportions. It also means your share of
the property can be left to the person of your
choice when you die.
In contrast, a property owned under a joint
tenant arrangement (usually by couples) is
held in equal shares. If one owner dies, their
interest automatically passes to the other
owner.
Shared property ownership only works if strict
ground rules and a tight contract are in place.
Everything needs to be in writing. Your legal
representative should be consulted.
The two most important points you need to
cover are what happens if one owner wants to
sell their share and what happens if one owner
cannot meet their repayments.
We can determine your
combined borrowing capacity,
howmuch deposit you may
require and also arrange the
deposit bond if required.
Call for a
copy of our
articles on
co-ownership
and our most
frequently
asked
questions.
Whathappens ifIwanttosellmyportion?
Therearemanyoptions ifyoufindthatyoueitherwant
orneedtosellyourco-ownedproperty.
It is ineveryone’sbest interestto invest inaco-
ownershipagreementpriortopurchasingtheproperty.
Optionsshouldbe included intheagreementtoensure
agreementhasbeenreached inadvancetoavoid
futuredisputes.
Youcan:
•offeryoursharetoyourco-owners.
Theeasiestandbestoptioncouldbetoaskyourco-
ownersiftheywouldliketopurchaseyourshareinthe
property.
Thisallowsyoutonegotiatethepricewiththem
directly (avoidingrealestateagent’sselling fees).
Onceanagreementhasbeenreachedyoucan
arrangeacontractofsale foryourportionofthe
property.Thiscanbetrickythoughasyouwillwant
thehighestprice foryourportionoftheproperty
andtheywillwantthe lowest. It isadvisableto
discussandagreeontheprocess inadvance.
•letsomeoneelsemove inandpayyourshareof
themortgage.
Thiswayyoukeepyourshare inthepropertyand it
becomesan investment foryou.
Ifyouwantorneedto,youcanmoveback inatsome
point inthe future.
Onceagaina frankandopendiscussionwithyour
housematesonyourtenantselectionprocesswill
preventanydisputes.
•findsomeoneelsewhowantstobuyyourshare
intheproperty.
Youoroneofyourco-ownersmightknowa friend
whowould liketo‘geta foot’ontheproperty
ladder. Ifso,discuss itwithyourco-owners,make
suggestionsand letthenegotiationsbegin.
•Allagreetoselltheproperty.
Youneverknow...theymightbe inasimilarposition
andberelievedatthe idea.Discussyour intentions
withyourco-ownersand followyouragreedplanto
exittheproperty.
Theseareseriousand importantdiscussionsthat
shouldtakeplacepriortopurchasingaproperty
together.Thebetterunderstandinganddetailed
documentedprocesses inyouragreementofaction
totake inunexpectedcircumstanceswillhelpresolve
disputesandmaintainthe friendship inthe longer
term. Alsoensurethatyourhavethedocument
reviewedbyan independent legalexpertbefore
entering intotheco-ownershiparrangement.
WillIstillreceivetheFirstHomeOwnerGrant ifone
oftheownershasalreadyreceived it?
UnfortunatelytoreceivetheFirstHomeOwner
Grant (FHOG)allco-ownersmustmeettheeligibility
criteriaotherwisethegrant is forgone. Ifyouallmeet
thecriteriahowever,youandyourco-ownerswill
onlyreceiveonegrantof$7,000 foryourproposed
purchase.Youwillnotreceiveaseparategrantof$7,000
each.
DoIhaveto live intheproperty?
That isthebestpart!No,youdonothaveto live in
theproperty.30%ofco-ownersare investors. It isan
excellentwayto‘getyour foot’inthepropertydoor
andstarttheprocessofcreatingyourfinancial future.
RemembertheFHOG isnotavailableon investment
properties.
Ifyouhaveanymorequestionsaboutco-ownership
pleasecontactus.
Mostfrequentlyasked
co-ownershipquestions
