In short: Buying with parents or siblings works when you hold the property as tenants in common in agreed shares, put a written co-ownership agreement in place before you sign the contract, and plan the exit on day one. Every borrower is liable for the whole loan, not just their share, so the arrangement must survive a job loss, a marriage or someone wanting out.
Key takeaways
- Tenants in common lets each owner hold a different share (say 60/40) and pass it on under their will; joint tenancy does not.
- Lenders count every borrower's income for servicing but also every borrower's debts and living expenses.
- Liability is joint and several: if your brother stops paying, the lender can pursue you for all of it.
- A co-ownership agreement covering contributions, costs, buy-outs and sale triggers is not optional.
- Transfers between co-owners later can trigger stamp duty and capital gains tax, so the exit plan has a cost.
Multi-generational buying is common in Melbourne's north, particularly among the Nepali, Indian and Sri Lankan families we work with in Craigieburn, Epping and Wollert. Pooling two or three incomes turns an unreachable house into a reachable one. The finance is the easy part. The structure and the exit are where families get hurt, and this post is about getting both right.
Choosing the ownership structure
Victoria offers two ways to hold title together.
| Joint tenants | Tenants in common | |
|---|---|---|
| Shares | Equal and undivided | Any split, for example 50/50, 60/40 or 70/20/10 |
| On death | Passes automatically to the surviving owner(s) | Passes under the deceased's will |
| Typical use | Married and de facto couples | Family members, friends, investors |
| Can one owner sell their share | Only by severing the joint tenancy first | Yes, subject to the agreement |
For parents and adult children, or siblings, tenants in common is almost always the right choice. Shares should reflect what each person actually puts in, both at purchase and in ongoing repayments. Our joint tenants vs tenants in common page explains the legal mechanics.
Worked example: siblings buying in Epping
Two sisters buy a $720,000 house in Epping. Anita contributes $100,000 of deposit and Priya contributes $44,000, so the equity contributions are $144,000 (20%). They hold the property as tenants in common 60/40 to reflect this, and they agree to split the $576,000 loan repayments 60/40 as well. For illustration, at 6.00% p.a. over 30 years the repayment is $3,453 a month, so Anita pays $2,072 and Priya pays $1,381. Both figures are recorded in the co-ownership agreement.
How lenders assess a family application
Lenders treat all applicants as borrowers. That means:
- All incomes count, which is the whole point. Two salaries of $85,000 service far more than one.
- All debts count, including a parent's existing mortgage, a sibling's car loan and everyone's credit card limits.
- All living expenses count, and a lender will usually assess each household's expenses separately if the owners will not live together.
- The assessment rate is the same: your rate plus 3 percentage points, so a $576,000 loan is tested at roughly $4,634 a month at 9.00% p.a.
Where one party is contributing income but not living in the property, some lenders apply a "common debt reducer" policy so that a co-borrower's share of the debt is apportioned when they later apply for their own loan. Not all do, and this matters enormously for the sibling who wants to buy their own place in three years. Test scenarios with the borrowing power calculator and ask us which lenders apportion.
Guarantor versus co-borrower
If a parent is only there to help, not to own, a guarantor structure is often cleaner. The parent's equity supports the loan, the child owns 100% and services the whole debt, and the guarantee is released once the LVR reaches 80%. The parent takes on risk but not a share of the title or the repayments. Compare the two on our guarantor home loans page and read the guarantor legal responsibilities before choosing. Our buying with a guarantor guide covers how the guarantee is released.
The co-ownership agreement
Get a solicitor to draft this before exchange. It should cover at least:
- Ownership shares and how they change if one person pays more later.
- Who lives there, and whether an occupying owner pays rent to a non-occupying owner.
- Repayment split and what happens if one person cannot pay for a period.
- Other costs: council rates, insurance, water, maintenance and any owners corporation fees.
- Decision-making: renovations, renting a room, refinancing.
- Exit triggers: marriage, relocation, death, divorce, financial hardship, a set date.
- Valuation method for a buy-out, and the timeframe the remaining owner has to refinance.
- Forced sale process if no one can or will buy the other out.
- Dispute resolution before anyone goes to court.
Our buying property with a partner page covers similar ground for couples, and the same principles apply to family.
Exit plans and what they cost
The most common exit is one owner buying the other out. Three costs sit in that transaction.
Stamp duty on the transfer
Transferring a share between co-owners is a dutiable transaction in Victoria, charged on the market value of the share transferred. On a 40% share of a $800,000 property, that is $320,000 of value. Some transfers between spouses or domestic partners for a principal residence are exempt, but transfers between siblings or between parents and children are generally not. Confirm your position with the State Revenue Office and estimate with the stamp duty calculator.
Capital gains tax
If the departing owner did not live in the property as their main residence, their share is subject to CGT on the gain since purchase, with the 50% discount if held more than 12 months. If Priya never lived in the Epping house and her 40% share grows by $80,000, roughly $40,000 is added to her taxable income in the year she sells to Anita. See our capital gains tax on property page and the ATO's CGT guidance.
Refinancing in one name
The remaining owner must show they can service the entire loan alone. If Anita's income cannot carry $576,000 by herself, the buy-out fails regardless of what the agreement says. Model this scenario before you buy, not when someone wants out.
Land tax and the family home
Land tax in Victoria exempts a principal place of residence. If a parent co-owns a home they do not live in, their share may lose the exemption and attract land tax on the land value. On a site value of $400,000, the full-property land tax would be $1,650 a year at the 2024–2033 rates, apportioned to the non-occupying share. The rules are nuanced; our land tax Victoria page explains them and the SRO can confirm your assessment.
Frequently asked questions
Can my parents help with the deposit without going on the title?
Yes. A gifted deposit needs a signed gift letter stating the money is non-refundable, and most lenders still want to see genuine savings of 5% from you or a gift held for three months. Alternatively parents can act as guarantor. Both options keep the title in your name alone and avoid the duty and CGT issues of a later transfer.
What if one sibling wants to sell and the other does not?
The co-ownership agreement should answer this. Typically the staying owner gets first right to buy the departing share at an independent valuation within a set period, failing which the property is listed for sale. Without an agreement, the departing owner may need to apply to VCAT or a court for orders, which is slow and expensive.
Does co-buying affect my first home buyer benefits?
The First Home Owner Grant and Victorian stamp duty concessions require every purchaser to be eligible and at least one to live in the property for 12 months. If a parent who has owned property before goes on the title, the concession is usually lost or reduced. The First Home Guarantee also requires all borrowers to be first home buyers. Check before you structure the purchase.
Talk to GNT Finance
Gorakh Timilsina has structured family purchases across Melbourne's north for years and knows which lenders apportion debt fairly for co-borrowers who later want their own home. There is no cost to you for our home-loan service in most cases. Book a free consultation or call 0426 403 703.
This page is general information only and not legal, tax or financial advice. Laws change — confirm current rules with the State Revenue Office, the ATO or a licensed professional.
Written by Gorakh Timilsina
Founder, CEO & Senior Mortgage Consultant at GNT Finance. Gorakh started as a broker assistant, spent years as a senior credit officer assessing loan applications, and now helps Melbourne families get the right loan approved. English, Nepali and Hindi spoken.