Can I buy property with family or friends?
There are many ways you can get onto the property ladder. We can talk you through several options including purchasing property with family or friends.
Buying property with family or friends is becoming increasingly common. It’s usually set up as a tenants-in-common purchase, which lets two or more people own an interest in a property.
What are the advantages of purchasing with family or friends?Advantages of purchasing as tenants-in-common include:
- Sharing the purchase price and fees
- Sharing ongoing costs like loan repayments, maintenance and upkeep and property management fees
- You can sell or leave your share to whoever you choose, for example children from a previous marriage.
How does home finance work in a shared purchase?
Lenders might let you to mortgage each share of the property independently. Other co-owners have no obligation to pay a mortgage that’s only over another owner’s share of the property.
But not all lenders offer these types of mortgages, so check your finance options with your mortgage broker before agreeing to any purchase.
If you’re a first home buyer, you may still be eligible for the First Home Owners Grant (FHOG), but you’ll need to check your eligibility with your mortgage broker. Generally, all people purchasing the property will need to be eligible for the FHOG, however only one grant will be issued per property.
What is a co-ownership agreement?
In order to avoid any problems in the future, it’s smart to enter into a Co-Ownership Agreement. Among other things, a Co-Ownership Agreement sets out the terms of on-selling shares in the property, the proportion of ownership and liability for costs such as the mortgage, maintenance and upkeep. You should talk to a solicitor to make sure your legal rights are protected.