What you need to know about Co-Buying Property in Australia in 2025

Key Takeaways

• Co-buying property in Australia has become an alternative solution for accessing the market, with combined incomes significantly increasing borrowing power and accelerating the path to property ownership

• Choosing between Joint Tenancy (equal shares with automatic transfer rights) and Tenants in Common (flexible ownership) depends on your relationship and financial goals

• From July 1, 2024, some First Home Buyer schemes expanded eligibility beyond traditional couples to allow any two eligible individuals to purchase together, subject to meeting individual criteria and state-specific rules

• Some banking solutions include split-loan options and mediation support, but stronger legal agreements remain crucial due to enhanced documentation requirements

• Multiple Owners Corporations and Housing Co-operatives represent different property ownership and governance structures that may be relevant in specific co-buying scenarios, particularly for apartments or community-focused living

Australia's property market has reached unprecedented heights, with property prices continuing to outpace individual wage growth. For many first-time buyers and investors, co-buying has transformed from an option into a necessity for accessing property ownership.

Why Co-Buying Has Become Essential for Property Access in 2025

The mathematics of co-buying are compelling. Combined household incomes can significantly increase borrowing power compared to single applicants, while dual deposits can dramatically accelerate the timeline to property ownership. This acceleration has made co-buying increasingly attractive as property prices continue to outpace individual wage growth.

Tenants in common arrangements are becoming increasingly popular among non-traditional co-ownership partnerships throughout 2024, reflecting the growing trend of friends, siblings, and investment groups banding together to overcome affordability barriers that would otherwise prevent market entry.

Choosing Your Ownership Structure

The choice between Joint Tenancy and Tenants in Common fundamentally shapes how ownership operates and what happens when circumstances change. Each structure serves different relationships and goals, making the selection critical for long-term success.

Joint Tenancy: Equal Shares with Automatic Transfer Rights

Joint Tenancy creates equal ownership shares for all parties, regardless of individual financial contributions. The defining feature is the right of survivorship – when one owner dies, their share automatically transfers to the surviving owners without going through probate. This structure works best for couples or committed partners who want simplified estate planning.

The automatic transfer provides significant advantages for estate planning and Capital Gains Tax purposes, particularly when the property qualifies for the Main Residence Exemption. However, this structure prevents owners from leaving their share to children or other beneficiaries through their will, and restricts individual ability to sell or transfer ownership without unanimous consent from all parties.

Tenants in Common: Flexible Ownership for Non-Traditional Partnerships

Tenants in Common allows customised ownership shares that reflect actual financial contributions – for example, if one person contributes 70% of the purchase price, they can own a 70% share. This flexibility makes it ideal for friends, siblings, or investment partners with unequal financial capacity.

Each owner maintains full testamentary control, meaning they can leave their share to any beneficiary through their will. Owners can also sell or transfer their portion independently, providing greater personal liquidity. However, this structure requires probate when an owner dies, and surviving co-owners risk becoming partners with unexpected beneficiaries they never intended to work with.

Multiple Owners Corporation

Multiple Owners Corporations (MOCs) are not a form of co-buying but a way to manage shared facilities in complex developments. MOCs apply to complex developments where different groups of lot owners need separate governance structures. In a mixed-use building, for example, residential owners might form one limited Owners Corporation while commercial tenants form another, with an unlimited Owners Corporation managing shared common property.

This structure allows focused attention on specific needs of each property type while sharing costs of overall building maintenance. However, it introduces additional governance complexity and mandatory levies that must be managed alongside internal co-ownership arrangements.

Housing Co-operatives

Housing Co-operatives differ significantly from typical co-buying arrangements as they prioritize community living and shared governance over individual title ownership. Housing Co-operatives operate as member-driven organisations focused on providing affordable housing through democratic control principles. Members actively participate in management and governance, sharing both responsibilities and benefits of community living.

While offering affordability and community focus, housing co-operatives don't provide traditional individual title ownership. Members must adhere to strict governance requirements and cooperative principles, making this structure unsuitable for typical co-buying scenarios between friends or investors.

Which Structure Suits Your Co-Buying Arrangement

Couples seeking simplicity and automatic inheritance should consider Joint Tenancy, while friends or family members with unequal contributions benefit from Tenants in Common flexibility. Investment groups often prefer Tenants in Common for its individual transferability and tax planning advantages.

Multiple Owners Corporations suit complex developments requiring specialised governance, while Housing Co-operatives serve those prioritising community living over individual ownership rights. The decision should align with relationship dynamics, financial contributions, and long-term objectives.

Legal Agreements That Protect All Co-Buyers

Well-structured co-ownership agreements prevent disputes and establish frameworks for managing shared property responsibilities. These documents become legally binding roadmaps for managing ownership challenges before they arise.

Essential Elements Every Co-Ownership Agreement Must Include

Co-ownership agreements must detail ownership shares, financial contributions, and ongoing responsibilities. This includes specifics about mortgage payments, maintenance costs, insurance obligations, and decision-making processes for major property decisions like renovations or tenant selection.

The agreement should address use and occupancy rights, particularly if some owners will live in the property while others treat it as an investment. Tax implications must be clearly outlined, including how rental income, expenses, and capital gains will be distributed according to ownership shares.

Exit Strategies and Dispute Resolution Clauses

Exit strategies protect all parties when circumstances change. Agreements should specify processes for voluntary sales, forced sales, and buy-out procedures when one owner wants to leave. This includes valuation methods, first right of refusal provisions, and timelines for completing transactions.

Dispute resolution clauses establish escalation procedures from direct negotiation through mediation to binding arbitration. These mechanisms provide structured approaches for resolving disagreements without resorting to expensive litigation that could force property sales.

First Home Buyer Grants and Co-Ownership Eligibility Changes

Significant policy changes in 2024 have expanded opportunities for co-buyers to access government assistance schemes, making shared ownership more attractive for eligible participants.

Expanded Eligibility for Co-Buyers Under First Home Buyer Schemes

From July 1, 2024, some First Home Buyer schemes expanded eligibility beyond traditional couples to allow any two eligible individuals to purchase together, subject to meeting individual criteria and state-specific rules. This expansion recognises modern buying patterns and makes government support available to friends, siblings, and other non-traditional partnerships.

The change acknowledges that co-buying often occurs between people who aren't romantically involved but want to combine resources for property access. However, all parties must individually meet first home buyer criteria – if one person has previously owned property, the entire group becomes ineligible.

State-Specific Stamp Duty Concessions for Co-Buyers

Several states, including Victoria and NSW, have introduced targeted stamp duty concessions for co-buyers who are first home owners or family members. Eligibility requirements and concession amounts vary significantly by state and can change. These concessions can provide substantial savings, particularly on higher-value properties where stamp duty represents a significant cost barrier.

Eligibility requirements vary by state, and some concessions apply proportionally based on the eligible buyer's ownership share. Co-buyers should investigate available concessions early in their planning process to understand potential savings and structure their arrangements accordingly.

Financing Challenges and New Banking Solutions for Co-Buyers

The lending landscape for co-buyers has evolved significantly, with banks developing new products while implementing stricter documentation requirements to manage risk.

Combined Serviceability Assessment and Credit History Requirements

Lenders assess all co-borrowers' financial positions collectively, meaning one person's weak credit history or limited income can impact the entire application. Banks evaluate combined serviceability but also examine individual capacity to understand each person's ability to meet obligations independently.

ASIC has tightened responsible lending checks for co-borrowers, requiring clearer documentation of each party's financial contribution and benefit from the arrangement. This enhanced scrutiny aims to prevent situations where borrowers don't understand their joint and several liability obligations.

Split-Loan Options and Mediation Support from Major Banks

Some banking solutions include split-loan options, which allow co-borrowers to separate portions of their loan, providing flexibility when one party wants to exit early or circumstances change. These arrangements can simplify the process of buying out a departing co-owner without refinancing the entire loan.

Major banks now offer mediation support for co-borrowers, recognising the complexities of joint lending relationships. This support helps manage disputes and provides structured processes for resolving conflicts before they impact loan performance.

Enhanced Documentation Requirements from Increased Regulatory Scrutiny

Banks require detailed co-ownership agreements that outline rights, responsibilities, and exit strategies before approving joint loans. These agreements must demonstrate that all parties understand their obligations and have considered potential scenarios that could affect their ability to service the debt.

Documentation must clearly establish that each borrower receives substantial benefit from the loan arrangement, complying with Banking Code of Practice requirements. This often means detailed explanations of how ownership, occupation, and financial benefits will be distributed among co-buyers.

Combined Incomes Unlock Significantly More Borrowing Power

The borrowing capacity benefits of combined incomes extend beyond simple addition of individual capacities. Lenders often view dual-income applications more favourably due to reduced risk of total income loss, leading to better interest rates and loan terms.

Two people earning $60,000 each may qualify for significantly more than a single person earning $120,000, particularly when both have stable employment histories and good credit ratings. This multiplier effect becomes even more pronounced when both parties contribute substantial deposits, reducing the loan-to-value ratio and potentially eliminating mortgage insurance requirements.

However, co-buyers must understand that liability remains joint and several – each person remains responsible for the entire debt if others default. This shared responsibility makes careful selection of co-buying partners crucial, as financial difficulties for one party directly impact all others involved in the arrangement.