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Everything you need to know before buying real estate is included in our Australia Property Pack
Co-buying a home in Australia has become increasingly popular as property prices continue to rise across major cities.
As of September 2025, co-buyers typically need a 5% deposit each if eligible for government schemes, though traditional lenders require 10-20% deposits. Joint liability means all parties are responsible for the full mortgage debt, and choosing between "joint tenants" or "tenants in common" structures significantly impacts ownership rights and exit strategies.
If you want to go deeper, you can check our pack of documents related to the real estate market in Australia, based on reliable facts and data, not opinions or rumors.
Co-buying property in Australia requires careful planning around deposits, legal structures, and exit strategies, with all parties being jointly liable for mortgage repayments.
The choice between joint tenants and tenants in common ownership structures affects inheritance, selling rights, and flexibility for future changes in ownership.
| Aspect | Key Requirements | Cost Range |
|---|---|---|
| Deposit per buyer | 5% (with government schemes) or 10-20% (traditional) | $42,200-$168,800 for median home |
| Stamp duty | Varies by state and property value | $21,425-$31,070 for $700k property |
| Legal fees | Split between co-buyers | $1,400-$2,000 total |
| Ongoing costs | Council rates, strata, insurance, maintenance | Split by ownership share |
| LMI (if applicable) | Required for deposits under 20% | $15,000-$20,000 for 5% deposit |
| Exit strategies | Buyout, refinance, or property sale | Based on market value and agreement |
| Co-ownership agreement | Essential legal document | $2,000-$5,000 for comprehensive agreement |
How much deposit would each co-buyer need to contribute to buy a property together in Australia right now?
Each co-buyer in Australia needs to contribute a deposit that varies based on their eligibility for government schemes and lender requirements.
As of September 2025, eligible first-home buyers can access the expanded Home Guarantee Scheme with deposits as low as 5% of the property value per buyer. From October 1, 2025, all first-home buyers can access unlimited places in the scheme with no income caps, making it easier to enter the market with smaller deposits.
For non-eligible buyers or those seeking traditional financing, most lenders require deposits of 10-20% of the property value per co-buyer. A 20% deposit is ideal as it avoids Lenders Mortgage Insurance (LMI) and typically secures better interest rates.
Using the median Australian home price of approximately $844,000 as an example, a 5% deposit would require $42,200 total to be split between co-buyers, while a 20% deposit would need $168,800 total. The exact split depends on your co-ownership agreement and individual financial contributions.
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What are the upfront costs like stamp duty, legal fees and inspections, and how should co-buyers split them fairly?
Upfront costs for property purchases in Australia typically total 7-11% of the property's value and should be clearly outlined in your co-ownership agreement.
Stamp duty varies significantly by state and property price, ranging from $21,425 to $31,070 for a $700,000 property. Legal and conveyancing fees generally cost $1,400-$2,000 total, while building and pest inspections add another $300-$1,000.
Most co-buyers split these costs according to their ownership percentages. For example, if one person owns 60% and another owns 40%, they would typically pay stamp duty and other costs in the same proportion. However, some groups prefer to split certain costs equally regardless of ownership shares, particularly inspection fees that benefit all parties equally.
Additional upfront costs include mortgage registration fees, transfer fees, and potentially Lenders Mortgage Insurance if your deposit is under 20% of the property value. LMI costs can range from $8,000-$12,000 for a 10% deposit or $15,000-$20,000 for a 5% deposit on a $500,000 loan.
The fairest approach is documenting the cost-splitting arrangement in writing before purchasing, considering both ownership percentages and each party's financial capacity.
How do Australian banks assess co-borrowers, and will everyone's credit history impact the loan approval and interest rate?
Australian banks assess all co-borrowers jointly, meaning every person's financial profile affects the group's loan approval and terms.
All co-borrowers are jointly and severally liable for the home loan, so if one person defaults, the other borrowers become responsible for the full debt. This joint liability extends to credit assessment, where lenders evaluate the combined income, debts, expenses, and credit histories of all applicants.
Banks calculate the group's borrowing capacity using everyone's income but also consider the highest debt-to-income ratio and lowest credit score among the applicants. A poor credit history from one co-borrower can result in higher interest rates for the entire group or even loan rejection.
Lenders typically require all parties to demonstrate genuine savings equivalent to at least 5% of the property value, though some accept gifts or guarantor arrangements. The application process involves all co-borrowers providing income statements, tax returns, bank statements, and credit authorizations.
To strengthen your application, ensure all co-borrowers have stable employment, minimal existing debts, and clean credit histories before applying. Any defaults, bankruptcies, or irregular income patterns will impact the entire group's borrowing terms.
What loan structures are available for co-buying, and which provides the most flexibility if someone wants to exit later?
Australian co-buyers can choose between two main ownership structures: joint tenants or tenants in common, with the latter offering significantly more flexibility for future changes.
| Structure | Ownership Rights | Exit Flexibility |
|---|---|---|
| Joint Tenants | Equal shares, automatic survivorship | Must sever tenancy to sell individual share |
| Tenants in Common | Defined shares (equal or unequal) | Can sell/transfer individual shares independently |
| Severance Process | Converts joint tenancy to tenants in common | Requires all parties' consent in most states |
| Death Benefits | Joint: automatic transfer to survivors | Common: share passes through will/estate |
| Selling Requirements | Joint: all parties must agree to sell | Common: individual shares tradeable |
| Mortgage Liability | Both structures: all parties fully liable | Liability remains regardless of ownership change |
| Best For | Joint: married couples, life partners | Common: friends, business partners, family |
Tenants in common allows individuals to hold distinct, defined shares in a property that can be equal or unequal, and each owner can sell or transfer their share independently.
For maximum exit flexibility, tenants in common is typically the better choice as it allows individual share transfers without requiring consent from other owners, though mortgage liability remains with all original borrowers until the loan is refinanced or paid off.
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What are the ongoing costs like council rates, strata fees, maintenance and insurance, and how do co-owners agree to share them?
Ongoing property costs in Australia should be clearly allocated in your co-ownership agreement to avoid future disputes.
The main ongoing costs include council rates (typically $1,200-$3,000 annually), strata or body corporate fees for apartments ($2,000-$8,000+ annually), building insurance ($800-$2,000 annually), contents insurance, utilities, and maintenance expenses.
Most co-owners split these costs according to their ownership percentages. For example, if you own 60% of the property, you'd typically pay 60% of all ongoing costs. However, some groups prefer different arrangements for different cost types - equal splitting for utilities if all parties use the property equally, but proportional splitting for rates and insurance.
For rental properties, co-owners must also consider property management fees (typically 5-10% of rental income), repairs and maintenance, vacancy periods, and potential rental arrears. These costs and responsibilities should be allocated proportionally to ownership shares.
The co-ownership agreement should specify how costs are paid (joint account vs individual reimbursement), what constitutes a "major expense" requiring all parties' approval, and procedures for handling emergency repairs. Regular financial reviews help ensure all parties remain comfortable with the ongoing cost arrangements.
What happens legally if one co-owner wants to sell their share but the others don't?
When co-owners disagree about selling, the resolution depends on your ownership structure and the terms of your co-ownership agreement.
Under tenants in common, individual owners can sell or transfer their share to third parties without requiring consent from other owners. However, joint tenants must first sever the joint tenancy before they can dispose of their individual interest.
If the co-ownership agreement includes a "right of first refusal" clause, departing owners must offer their share to existing co-owners before selling to external buyers. This protects remaining owners from unwanted new partners while potentially providing exit opportunities at market rates.
When co-owners cannot reach agreement, Australian courts can order property partition under state Property Law Acts, typically resulting in a forced sale with proceeds divided according to ownership shares. This legal remedy is expensive and time-consuming but provides a final resolution mechanism.
Smart co-ownership agreements include dispute resolution procedures such as mediation requirements, professional valuation processes for buyouts, and clear timelines for decision-making. These clauses can prevent costly court proceedings while ensuring fair treatment for all parties.
It's something we develop in our Australia property pack.
How do co-buyers protect themselves with a co-ownership agreement, and what clauses are critical under Australian law?
A comprehensive co-ownership agreement is essential for protecting all parties' interests and preventing costly disputes in Australian property co-ownership arrangements.
Critical clauses must include ownership percentages, contribution requirements for deposits and ongoing costs, decision-making procedures for major expenses and improvements, dispute resolution mechanisms, and detailed exit strategies including buyout procedures and valuation methods.
Essential protective clauses include default provisions (what happens if someone can't meet mortgage payments), death and disability scenarios, relationship breakdown procedures, and restrictions on further borrowing against the property. The agreement should specify whether departing owners must offer their shares to remaining co-owners first and at what valuation method.
Under Australian law, the agreement should address land tax obligations, capital gains tax calculations, rental income distribution (if applicable), and compliance with tenancy laws if the property will be rented. State-specific requirements may apply, particularly regarding property transfers and stamp duty implications.
Professional legal drafting is strongly recommended, typically costing $2,000-$5,000 for a comprehensive agreement. This upfront investment can save tens of thousands in legal fees and relationship damage if disputes arise later. Regular agreement reviews ensure the document remains current with changing circumstances and legislation.
What are the tax implications for each co-owner, including capital gains tax and land tax, when they eventually sell?
Australian tax implications for co-ownership vary significantly depending on ownership structure, property use, and individual circumstances.
Capital gains tax (CGT) is calculated based on each owner's share of the property, with tenants in common paying CGT according to their defined ownership percentages, while joint tenants split gains equally. If the property serves as anyone's main residence, they may be eligible for the main residence exemption on their share of any capital gain.
Land tax obligations apply to all co-owners jointly, regardless of ownership structure, though the calculation considers each owner's total land holdings. Some states provide land tax exemptions for principal places of residence, but investment properties are typically subject to annual land tax based on total land value.
For rental income, each co-owner reports their proportional share on their individual tax return and can claim deductions for their share of expenses including interest, maintenance, insurance, and depreciation. Negative gearing benefits apply individually based on each owner's share of losses.
When selling, timing can significantly impact tax outcomes. Properties held for over 12 months may qualify for the 50% CGT discount, while properties sold within 12 months face full capital gains tax rates. Co-owners should coordinate timing and consider their individual tax positions when planning sales.
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How does co-buying affect eligibility for the First Home Owner Grant or stamp duty concessions in different Australian states?
Co-buying significantly impacts eligibility for first-home buyer incentives, with requirements varying considerably across Australian states and territories.
As of October 2025, the expanded Home Guarantee Scheme allows all first-home buyers to purchase with 5% deposits and no Lenders Mortgage Insurance, with unlimited places and no income caps. However, all co-buyers must individually qualify as first-home buyers for the group to access these benefits.
For the First Home Owner Grant, eligibility typically requires that all purchasers are first-home buyers who haven't previously owned property in Australia. If even one co-buyer has previously owned property, the entire group may lose access to grants ranging from $10,000-$30,000 depending on the state and property type.
Stamp duty concessions follow similar all-or-nothing rules in most states. New South Wales, Victoria, Queensland, and other states require all purchasers to be eligible first-home buyers to access stamp duty exemptions or reductions that can save tens of thousands of dollars.
Some states offer partial concessions where eligible co-buyers can claim their proportional share of benefits, but this varies significantly by jurisdiction. The complexity of multi-state rules makes professional advice essential, particularly for co-buyers with different residential or ownership histories.
It's something we develop in our Australia property pack.
What's the resale outlook for co-owned properties, and how might multiple owners affect marketability?
Multiple ownership can complicate property resale, though proper planning and documentation significantly improve marketability outcomes.
Properties with unclear ownership structures or unresolved co-ownership agreements can deter potential buyers who prefer straightforward transactions. Buyers typically avoid properties where they're uncertain about the sellers' authority to complete the sale or where ongoing disputes might affect settlement.
Joint tenants generally have fewer marketability issues since all parties own the property collectively and must agree to any sale. However, tenants in common arrangements can be more complex, particularly if some owners want to sell while others don't, potentially leading to court-ordered partition sales that may not achieve optimal market prices.
To maximize marketability, co-owners should maintain clear records of ownership percentages, ensure all parties are contactable and cooperative, and resolve any disputes before listing. Properties with well-documented co-ownership agreements and unanimous seller consent typically attract stronger buyer interest and better prices.
The current strong demand in Australian property markets means well-presented co-owned properties rarely face significant marketing challenges, provided all legal requirements are met and vendors present a united front. Professional marketing and legal support can overcome most ownership-related complications during the sales process.
What risks come with co-buying if one person can't meet mortgage repayments, and how do lenders typically enforce liability?
Joint and several liability means all co-borrowers face significant financial risks if any party defaults on mortgage repayments.
When co-borrowers are jointly and severally liable, if one person defaults, lenders can pursue all other borrowers for the full debt amount, potentially forcing property sale or impacting all parties' credit ratings. This liability continues regardless of ownership percentage - even a 10% owner can be held liable for 100% of the mortgage debt.
Lenders typically follow a escalating enforcement process: missed payment notices, default letters, formal demand, and ultimately mortgage enforcement through property sale. During this process, all co-borrowers' credit files are affected, impacting their future borrowing capacity even if they weren't the defaulting party.
If mortgage enforcement proceeds result in insufficient funds to cover the debt, lenders can pursue remaining co-borrowers for any shortfall through wage garnishment, asset seizure, or bankruptcy proceedings. Personal assets of all co-borrowers remain at risk until the full debt is satisfied.
Risk mitigation strategies include comprehensive co-ownership agreements with default procedures, income protection insurance, and regular financial reviews. Some co-buyers establish emergency funds or cross-guarantees to cover temporary payment difficulties, though these arrangements require careful legal structuring to avoid additional complications.
What exit strategies are realistic in Australia—like buyouts, refinancing or selling the property—and how should co-owners plan for them now?
Australian co-owners have several exit strategies available, but advance planning through comprehensive agreements significantly improves outcomes for all parties.
Buyout arrangements allow remaining owners to purchase departing parties' shares, typically at independent market valuation. The co-ownership agreement should specify valuation methods, payment terms, and whether existing owners have right-of-first-refusal before external sales.
Refinancing enables remaining owners to obtain new financing that excludes the departing party, effectively removing them from mortgage liability. However, remaining owners must qualify for the full loan amount based on their individual borrowing capacity, which may require additional security or guarantors.
Property sale represents the cleanest exit strategy, with proceeds distributed according to ownership percentages after paying selling costs and outstanding debts. Forced sale provisions in co-ownership agreements provide resolution mechanisms when parties cannot agree on voluntary sales.
Smart planning includes regular property valuations, pre-agreed exit procedures, dispute resolution mechanisms, and financial reviews to ensure all parties can meet ongoing obligations. Legal and financial advice during agreement drafting helps structure exit strategies that protect everyone's interests while providing practical resolution pathways when relationships or circumstances change.
Conclusion
This article is for informational purposes only and should not be considered financial advice. Readers are advised to consult with a qualified professional before making any investment decisions. We do not assume any liability for actions taken based on the information provided.
Co-buying property in Australia offers significant opportunities to enter the property market with reduced individual financial burden, but requires careful planning and legal protection.
Success depends on choosing appropriate ownership structures, comprehensive co-ownership agreements, and advance planning for potential exit scenarios to protect all parties' interests.
Sources
- Money.com.au - How Much Do You Need For A House Deposit In 2025?
- Housing Australia - Unlimited places, higher property price caps for first home buyers
- Prime Minister of Australia - Albanese Government delivers 5% deposits for all first home buyers sooner
- Capitol Home Loans - How Much Deposit Do I Need to Buy a House in Australia in 2025?
- Westpac - How much deposit you'll need upfront to buy a home
- Home Loan Experts - Property Ownership: Joint Tenants Or Tenants In Common
- Legal Vision - The Difference Between Joint Tenancy & Tenants in Common
- Australian Taxation Office - Co-ownership and right of survivorship
- LJ Hooker - A Short Guide To Property Co-Ownership
- Lawdocs - Joint Tenants vs. Tenants in Common: Guide to Co-owning Property in Australia