In short: When you buy property with a partner, friend or sibling in Victoria, you choose between joint tenancy and tenancy in common on the title, you are each liable for the whole home loan regardless of your share, and a written co-ownership agreement is the best protection if things change. Couples are also subject to the Family Law Act 1975 (Cth) on separation, while other co-owners rely on the Property Law Act 1958 (Vic) and their agreement.
Two incomes buy more house, and in Melbourne's north couples, siblings and close friends often pool resources to get in sooner. The legal questions are simple to answer at the start and expensive to fight about later.
What the law says
Title: how you own it
Under the Transfer of Land Act 1958 (Vic), co-owners are registered either as joint tenants (equal, undivided, with survivorship) or as tenants in common in specified shares. The choice is recorded on the transfer at settlement. Our page on joint tenants vs tenants in common explains the difference in detail. The short version: couples usually choose joint tenancy; friends, siblings and unequal contributors usually choose tenancy in common in shares that reflect their contributions.
The loan: how you owe it
Every borrower on a home loan is jointly and severally liable for the entire debt under the loan contract, and the National Consumer Credit Protection Act 2009 (Cth) doesn't change that. If one of you stops paying, the lender can pursue the other for the whole repayment and, ultimately, the whole balance. The lender's mortgage is over the whole property, not over each person's share.
Couples: family law
For married and de facto couples, the Family Law Act 1975 (Cth) governs property settlement on separation. The court looks at contributions (financial and non-financial, including homemaking and parenting) and future needs, and can adjust ownership regardless of what the title says. A 70/30 title split is evidence of contributions, not a guarantee of the outcome. A binding financial agreement can set the terms in advance, but it requires independent legal advice for each party.
De facto status generally requires living together on a genuine domestic basis, and thresholds apply before the family law property regime applies, such as a relationship of at least 2 years, a child, or substantial contributions.
Non-couples: co-ownership law
Friends, siblings and business partners fall outside family law. Part IV of the Property Law Act 1958 (Vic) allows a co-owner to apply to VCAT for an order that the property be sold or physically divided, and for the proceeds to be split taking into account each owner's contributions and any agreement between them. Without a written co-ownership agreement, VCAT decides on evidence of who paid what, which is slower and less certain.
Duty and grants
- Under the Duties Act 2000 (Vic), the first home buyer exemption (up to $600,000) and concession (to $750,000) generally require all purchasers to be first home buyers and at least one to live in the property for 12 months. If one of you has owned before, the concession is generally lost for the whole purchase; see stamp duty exemptions and concessions.
- The $10,000 First Home Owner Grant for a new home similarly requires all applicants to be eligible.
- A transfer of the principal place of residence between spouses or domestic partners is duty-exempt, and transfers under a family law order or binding agreement on separation are exempt. Transfers between friends or siblings are dutiable on the share transferred.
Government schemes
- The First Home Guarantee (5% deposit, no LMI, Melbourne price cap $950,000) allows two eligible buyers to apply together, and since 2023 they don't have to be a couple, so siblings or friends can use it jointly. Both must meet the eligibility rules. See our First Home Guarantee guide.
- Help to Buy has an income cap of $160,000 for a couple and $100,000 for a single at the time of writing.
Setting it up properly, step by step
- Agree contributions. Deposit, purchase costs, and how repayments and outgoings will be shared.
- Choose the title structure to reflect the agreement. Unequal contributions usually mean tenants in common in unequal shares.
- Sign a co-ownership agreement (for non-couples, essential; for couples, wise if contributions are unequal). It should cover: the shares, who pays what, how repairs and improvements are funded and credited, what happens if one wants to sell or can't pay, how the property is valued for a buy-out, first right of refusal, dispute resolution, and what happens on death or incapacity.
- Make wills. Tenants in common shares pass under a will; without one, intestacy rules apply.
- Apply for the loan together. Both incomes and liabilities are assessed. Our borrowing power calculator shows the combined capacity.
- Consider insurance. Life and income protection that covers each borrower's share of the loan protects the other.
- Review at milestones. Marriage, children, a new job interstate, or one party buying elsewhere are the points to revisit the agreement.
What each arrangement gives you
| Question | Couple, joint tenants | Friends, tenants in common 60/40 with agreement |
|---|---|---|
| Who inherits a share on death | Survivor, automatically | Deceased's beneficiary under their will |
| Who decides on sale | Both must agree; family law on separation | Per agreement; VCAT if no agreement |
| Ownership if contributions are unequal | Equal on title; adjusted by family law if separated | Unequal shares on title from day one |
| Liability for the loan | Both for 100% | Both for 100% |
| Duty on later transfer between owners | Exempt (PPR or on separation) | Dutiable at general rates |
| First home buyer concession | Both must be eligible | Both must be eligible |
Worked example
Two sisters buy a $650,000 house in Craigieburn. One contributes $78,000 to the deposit and costs, the other $52,000, a 60/40 split, and they borrow $520,000 together. Both are first home buyers who will live in the property, so the first home buyer concession reduces the duty. They register as tenants in common 60/40 and sign a co-ownership agreement.
Three years later, one sister wants to move interstate. The agreement says the remaining owner has first right to buy the other's share at a valuation from an agreed valuer. The property is now worth $720,000 and the loan is $490,000, so net equity is $230,000; a 40% share is $92,000. The remaining sister refinances alone: the lender assesses her income against the full $490,000 plus $92,000, and she qualifies. The transfer of the 40% share attracts duty on its value, which she budgets for.
Without the agreement, the departing sister could have applied to VCAT for a sale, and both would have paid agent's fees and lost control of the timing.
What it means for your home loan
- Both borrowers, all liabilities. Each person's debts, HECS, credit cards and expenses reduce the joint capacity. Clean up before applying.
- Serviceability is joint but exit is solo. Whoever keeps the home must qualify for the whole loan alone. Model that before you buy, not after.
- Refinancing on separation. Removing a partner from the loan and title is a refinance plus a transfer, usually duty-exempt for couples under a family law agreement. Lenders need the agreement or court order.
- Guarantors for one party. If only one buyer's parents provide a guarantee, the agreement should address it.
- Lender policies on non-couples. Some lenders treat friends buying together differently from couples, particularly for LMI and government schemes. A broker can select the right lender.
GNT Finance regularly arranges loans for siblings and friends buying together in Melbourne's north, including under the First Home Guarantee, and structures them so a future buy-out is achievable. Our home-loan service is at no cost to you in most cases.
Common mistakes
- No written agreement between friends or siblings.
- Equal shares on title with unequal money in, and no record of the difference.
- Assuming the loan is split. The lender can pursue either of you for all of it.
- One buyer who has owned before wiping out the first home buyer concession without anyone noticing.
- No plan for the exit, so the first disagreement becomes a forced sale.
- Not updating wills when the property is bought.
Frequently asked questions
Can I buy a house with a friend in Australia?
Yes. Friends can buy together as tenants in common in whatever shares they agree, and apply for a joint home loan. Both will be jointly and severally liable for the loan. A written co-ownership agreement covering contributions, expenses, exit and valuation is strongly recommended. Since 2023 two eligible friends can also apply together for the First Home Guarantee with a 5% deposit.
What happens to a joint home loan if we break up?
The loan continues and both of you remain liable for the full repayments until it is refinanced or the property is sold. For couples, the Family Law Act 1975 (Cth) governs how the property is divided, and a transfer between you under a court order or binding agreement is exempt from duty. One partner keeping the home must qualify for the loan alone.
If we buy a house together, do we both need to be first home buyers?
For the Victorian first home buyer duty exemption and the First Home Owner Grant, generally yes: all purchasers must satisfy the eligibility rules, and at least one must live in the home for 12 months. If one of you has owned property before, the concession is usually lost for the whole purchase. Check the position with your conveyancer and the SRO before you sign.
Should we own as joint tenants or tenants in common?
Couples who want the survivor to inherit automatically usually choose joint tenants. Friends, siblings, blended families and anyone contributing unequally usually choose tenants in common in matching shares, with wills to direct where each share goes. You can change later, but a transfer between non-spouses attracts duty, so decide before settlement.
Do we need a co-ownership agreement?
If you are not a couple, yes. Without one, disputes about contributions, sale and buy-out end up at VCAT under the Property Law Act 1958 (Vic), which is slow and uncertain. Couples with unequal contributions should also consider one, or a binding financial agreement under family law. The agreement should be drafted by a lawyer and signed before settlement.
Talk to GNT Finance
Buying with someone else works best when the loan is set up for both the purchase and the possible exit. GNT Finance will assess your joint capacity, check your scheme and concession eligibility, and choose a lender that suits how you plan to own. 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.