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Two deposits, two incomes and one property that neither of you could buy alone. Buying property with friends in Australia, or with a sibling or cousin, may get you into the market sooner. Your title might say you own 60% and your friend owns 40%, yet the loan you both sign usually says something very different.
That gap between what you own and what you owe is where most co-ownership problems start. It tends to surface when one person loses income, meets a partner, takes a job interstate or wants their money back. A conversation with first home finance specialists before you make an offer can help the title, the loan and the exit plan line up from the start.
How the title is held decides who inherits each share and how easily an owner can leave. Co-buyers in Queensland can usually choose from these structures:
Tenants in common hold defined shares, which can be equal or unequal, such as 50/50 or 70/30. Each share passes under its owner’s will, not to the other co-owner.
Friends and siblings commonly choose this structure because it can reflect different deposits and keeps each person’s stake with their own family. With a tenants in common home loan, the lender still lends against the whole property, and the ownership split appears only on the title, not in the loan contract.
Joint tenants own the whole property together in equal shares, with a right of survivorship. When one owner dies, their interest passes automatically to the surviving owner, whatever their will says.
Couples often choose joint tenancy for that reason. For co-buyers who are not a couple, it can mean your deposit ends up with your friend instead of your family.
A unit trust holds the property on behalf of the co-buyers, with each person owning units in proportion to their contribution. The trust deed can set rules for entry and exit.
The trade-offs are cost, administration and access to support. The Queensland Revenue Office (QRO) generally excludes trustees from the transfer duty home concessions, and the Australian Government 5% Deposit Scheme requires the buyers to be the registered owners of the property when the home loan settles.
A joint and several liability home loan makes every borrower responsible for the whole debt, together and individually, whatever the title says. For co-buyers, that shows up in these ways:
Two friends who buy a $900,000 home 50/50 with a $720,000 joint loan each own half the property, but each can be asked to repay the full $720,000.
When one stops contributing, the lender does not divide the arrears between you. It can pursue whichever borrower is able to pay, and recovering the other person’s share is then a private matter between the co-owners.
The mortgage is registered over 100% of the property, not over each share separately. A default by either borrower puts the whole home at risk, including the share belonging to the co-owner who kept paying.
A missed repayment by one co-owner can appear on both credit files, because repayment history is reported against every borrower on the account. That record can follow each of you into later applications for a car loan, a credit card or your next home.
Some co-buyers reduce this risk by paying the loan from a joint account that each person funds a few days before the due date.
Any shortfall after a forced sale remains owed, and the lender can recover it from either borrower in full. Where arrears are not fixed, the lender may eventually take possession and sell, with arrears, interest and sale costs deducted from the proceeds first.
When either of you applies for another loan, many lenders count the full repayment on the joint loan against you, not just your half. Some may accept a share of the repayment where there is evidence the co-owner pays their portion, depending on the lender’s policy.
A co-owner hoping to buy their own place later, or to buy out the other person, may find their borrowing power lower than expected while the joint loan remains.
Co-ownership property finance can be arranged in several ways. Each changes how repayments are organised without fully separating your liability from your co-owner’s:
A single joint loan is one contract with one repayment and one balance, and every borrower is jointly and severally liable. It is the simplest structure to set up and may suit co-buyers who contribute in the same proportions and want the same loan features.
The trade-off is flexibility. When one person wants to pay faster or fix their rate, the whole loan moves together.
Dividing one joint loan into separate portions creates a split joint loan. The portions might be one fixed and one variable, or one sized to each person’s share of the debt, and each co-owner can direct extra repayments towards the split they treat as their own. The splits still sit under one joint contract, so liability for every split remains shared.
A property share loan gives each co-owner their own loan for their own amount, with their own rate type, term and repayment choices. Lenders typically require each borrower to guarantee the other’s loan as a condition of approval. That guarantee means you can still be called on to repay your co-owner’s loan if they cannot, and the property remains security for both.
Separate loans can make day-to-day finances cleaner and let each person build their own repayment record. Some lenders cap the number of separate loans allowed against one property.
Friends and siblings can use the Australian Government 5% Deposit Scheme together, provided there are no more than two applicants and both meet every condition. The scheme replaced the earlier home guarantee schemes, including the First Home Guarantee, from 1 October 2025. Under it, Housing Australia guarantees part of the loan so eligible buyers can purchase with a 5% deposit and no lenders mortgage insurance (LMI).
Neither applicant can have held an interest in Australian property in the 10 years before the loan date. Both must move in within six months of settlement, or of the occupancy certificate for a new build, and keep living there while the scheme supports the loan. In Queensland, the price cap is $1,000,000 in Brisbane and the regional centres of the Gold Coast and Sunshine Coast, and $700,000 elsewhere in the state.
The guarantee can fall away if the property is rented out, the loan moves to a lender outside the scheme or extra funds are borrowed against the home.
Lender policies on co-borrower structures and scheme conditions vary and can change, so treat these details as a general guide only.
Lenders treat co-buyers as one application but look closely at each person inside it. Approval typically turns on:
Your incomes are combined and the repayments are tested at a rate higher than the one you will pay. The Australian Prudential Regulation Authority (APRA) confirmed on 28 May 2026 that the serviceability buffer stays at 3 percentage points, so a 6% loan is typically tested at around 9%.
APRA has also capped high debt-to-income (DTI) lending. Since 1 February 2026, the lenders it regulates can write no more than 20% of new mortgage lending at debt of six times income or higher.
Two incomes of $95,000 and $85,000 give a combined $180,000, so total debt of $1,080,000 or more would sit in that high-DTI band. The cap works across each lender’s whole book, not against your application directly, but a lender close to it may be less flexible on a large joint loan.
Every existing debt held by either applicant counts against the joint application. A credit card limit, car loan or buy now pay later account in one name reduces what the pair can borrow together.
A defaulted phone bill on one file can narrow the lender choice for both of you, even where the other record is spotless. Checking both credit reports before applying can avoid surprises at assessment.
Lenders want to see where the deposit comes from, including each person’s genuine savings and any gifted funds. Unequal contributions are common, but the title shares usually need to make sense alongside them.
Many lenders also check that each borrower receives a real benefit from the loan, which normally means holding a share of the title. A borrower carrying the full debt while owning only a token interest may be asked to explain the arrangement, or may not be accepted.
Loan pricing typically follows the loan’s purpose. A purchase where one co-owner lives in the home and the other invests may therefore be priced partly or wholly as an investment loan, depending on the lender’s policy. Investment loan advisers can usually tell you early how a given lender treats a mixed-purpose purchase, before the rate and features are locked in.
The investing co-owner may also want to factor in legislated tax changes. From 1 July 2027, an investor who bought established housing after 7:30pm AEST on 12 May 2026 can deduct losses only against residential property income, including capital gains, not against wages. Excess losses can be carried forward to future years.
Assessment rules differ between lenders, so treat these checks as a general guide.
In Queensland, each co-buyer’s transfer duty, commonly called stamp duty, is worked out on their own interest. According to QRO, an eligible buyer can claim the first home concession on their share even when the other buyers qualify for a different concession or none. A first home buyer and a co-buyer who has owned property before can therefore pay different amounts on the same purchase.
Under the first home concession rules, no duty is payable on an established home valued at $700,000 or less, and a reduced concession applies up to just under $800,000. For contracts signed from 1 August 2026, the buyer must also be an Australian citizen, permanent resident or specified foreign retiree. A brand-new home bought as a first home may qualify for a full concession with no value cap, provided the contract was signed on or after 1 May 2025.
Claiming a concession comes with obligations. Transferring all or part of the property within a year of moving in may reduce the claim to a partial concession, and the change has to be reported for reassessment. A buyout between co-owners in the first year can therefore cost more than the duty on the share alone.
These thresholds and conditions are set by QRO and may change, so treat them as a general guide. Other states and territories apply their own duty rules.
A co-ownership agreement is a private contract, usually drawn up by a solicitor before settlement, that governs how co-owners settle up with each other but does not bind the lender. Co-buyers commonly include:
The agreement records each person’s percentage and how it was calculated, so the title matches what you both understood.
Each owner’s monthly contribution is set out, along with the account it comes from and the date it is due. The clause covers the loan, rates, insurance, body corporate levies and repairs, plus how any shortfall is tracked as a debt between you.
Common remedies include a short grace period and a buyout or sale trigger after a set number of missed months. The other owner may also cover repayments as a recorded loan with interest.
Naming the valuation method in advance stops valuation becoming a second argument when someone leaves. One approach is a single registered valuer chosen jointly, with a second opinion allowed at the requesting party’s cost.
Agreements commonly give the staying co-owner the first right to buy the leaving owner’s share. The clause can allow a realistic period for loan approval, often several weeks, depending on the lender, so the deal does not collapse on a tight deadline.
A buyout that does not complete in time, repeated missed payments or a fixed review date can each be set as a point at which the property is sold. Agreeing on agent selection and a minimum price ahead of time keeps a forced sale orderly.
The agreement and both wills need to work together. Many co-buyers also look at life and income protection insurance, so a surviving owner could repay the loan or buy the share from the estate.
A staged process, usually negotiation and then mediation, can be required before either party applies to a court. Clear steps tend to cost less and move faster than litigation.
Every exit affects the title, the loan and any tax or duty that follows. The usual routes are:
The staying co-owner buys the leaving owner’s share and takes on the whole debt. A joint loan cannot simply drop a name. It is usually repaid and replaced with a new loan in one name, assessed on that person’s income alone, and refinance advisers can test that figure before a buyout price is agreed. The lender’s process mirrors a single-income buyout refinance after separation.
In Queensland, duty on the share is generally charged on the higher of the price paid and its unencumbered value. The duty exemptions available to separating couples apply to transfers under orders or agreements made under the Family Law Act 1975 (Cth). Those do not cover friends or siblings, so duty is generally payable on the share transferred. A home concession may reduce it where the buyer lives in the property and meets the criteria.
Where the original loan was under the 5% Deposit Scheme, replacing it may end the guarantee. The new lender may then require LMI if the loan is above 80% of the property value.
Selling to a third party is often the cleanest exit when neither co-owner can fund a buyout. The joint loan is repaid from the proceeds at settlement, and sale costs come out next. The balance is then divided according to your shares and any adjustments in the agreement.
Capital gains tax (CGT) is worked out separately for each owner on the portion they own. The main residence exemption typically applies only to the extent each owner used the property as their home, so a co-owner who never lived there may face a taxable gain while the other faces none.
Legislation passed in June 2026 also replaces the 50% CGT discount with a discount based on inflation and a minimum 30% tax rate, applying only to gains that accrue from 1 July 2027.
A tenant in common can legally sell their share to someone else. In practice, buyers for part of a property are scarce, and the joint mortgage still covers the whole title.
The lender would need to release the leaving borrower and approve the incoming one, which usually means a new application and a new loan. The co-ownership agreement may also give the remaining owner a say over who comes in.
Either co-owner can apply to a court for a sale when they cannot agree. In Queensland, these applications now fall under the Property Law Act 2023 (Qld), which took over from the 1974 Act on 1 August 2025.
The court can order a sale or a physical division without first appointing a statutory trustee. It will only order division where that is more just and fair than a sale, and it can order compensation or reimbursement between co-owners. Proceedings take time, and legal costs come out of the equity, so many co-owners treat this as a last resort.
The deceased owner’s share goes to their estate, but the loan does not split the same way. The surviving borrower remains liable for the whole debt while the share passes through the estate to the deceased owner’s beneficiaries.
The lender may ask the survivor to refinance in their own name or reach agreement with the estate on a sale. The steps that follow resemble inheriting a mortgaged property, with the added complexity of a living co-owner holding the other share.
Before either of you signs a contract of sale, write down together what would happen if one of you needed to leave in the first few years. Cover who has the first right to buy, how the property will be valued and how long a buyout can take. A solicitor can then turn those answers into the co-ownership agreement before settlement.
If you are weighing up buying with a friend or family member, Richard and the team at Ausfirst Lending Group can talk you through the loan structures that suit your circumstances.
Yes, many lenders accept more than two borrowers on one application, with the limit set by each lender’s policy. Every person’s income, debts and credit history is assessed, and the weakest file can shape the outcome.
Larger groups also make exits harder, because one person leaving can force a refinance for everyone who stays. Checking which lenders accept larger groups before committing to a property can save time later.
Rental income and expenses are split by each owner’s legal interest in the property. Under Australian Taxation Office (ATO) rules, this applies wherever co-owners are not running a rental business, and a private agreement to split them differently has no effect for tax.
A 70/30 title means a 70/30 split on each tax return, whoever paid the bills. Interest is the main exception. A co-owner who borrowed to buy their own share can claim all the interest on that borrowing without dividing it with the other owners.
Yes. With a family guarantee, a parent offers equity in their own home as extra security for part of your loan, without going on your title. Their exposure is usually limited to an agreed amount.
A parent who co-owns instead holds a share of the title, is typically a borrower on the full loan and can claim only the duty concessions they personally qualify for. Family guarantee advisers can compare both approaches against your deposit and your parent’s equity.
Usually, yes. A joint tenancy can generally be converted to tenants in common by lodging a transfer with Titles Queensland. QRO’s exemption for this change generally applies only where the owners hold equal shares afterwards.
Moving to unequal shares is a transfer of an interest, which may attract transfer duty. Lender consent is often needed too, because the mortgage is registered over the title.
A solicitor can confirm the forms, duty and lender steps before anything is lodged.
The loan stays joint, so the full repayment is still due each month. The lender can be asked for a financial hardship arrangement, such as a temporary pause or reduced repayments, and lenders usually expect every borrower to be involved in that request.
Contacting the lender before a repayment is missed generally keeps more options open. The co-ownership agreement then governs how the co-owner who covered the gap is repaid.
Yes. For the Queensland first home concession, holding any interest in a residence counts, whether it was owned solely or jointly and in equal or unequal shares. The 5% Deposit Scheme applies a similar test, looking back 10 years and including property held with someone else.
A co-owner who later buys alone will generally be treated as a non-first home buyer under both.
Extra repayments reduce the shared balance, which benefits both owners, but the title shares do not change on their own.
Some co-owners record extra repayments as a debt owed by the other party. Others agree that shares will be adjusted at sale or buyout. Our team can show how each option plays out on the loan, while the ownership adjustment itself needs to be documented by a solicitor.
This article is general information only. It does not take into account your objectives, financial situation or needs. Before acting on it, you may wish to speak with a qualified professional, such as a solicitor, tax agent or licensed finance professional, about your own circumstances.
