Sibling co-purchase has become increasingly popular in Sydney's property market, where individual incomes often aren't enough to buy independently. Two siblings combining their savings and borrowing power can access suburbs and property types that would be out of reach individually.
It works — but only if the ownership structure, mortgage responsibilities, and exit provisions are clear from day one. This guide covers everything you need to know.
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Why Siblings Buy Together
The numbers make sense in Sydney's market. Two siblings, each earning $80,000/year, can borrow approximately $700,000–$750,000 together — much more than either could individually. Combined deposits of $80,000–$100,000 represent a 10–12% deposit on a $700,000 property, which is workable with or without LMI.
The motivation is practical: buy sooner, share costs, and potentially live together (or rent together) while building equity.
Ownership Structure: Always Tenants in Common
For sibling purchases, tenants in common is the correct ownership structure. This allows each sibling to hold a defined percentage share (50/50 is most common, but unequal splits are possible if one contributes more). When either sibling dies, their share passes through their estate — not automatically to the other sibling.
Joint tenancy — where ownership is equal and passes automatically to the survivor — is typically for married couples. For siblings, it can create estate problems if one sibling has a spouse or children and their share automatically goes to the co-owner rather than their family.
The Mortgage: Both Siblings on the Loan
In a standard sibling co-purchase, both siblings are on the mortgage. Key points:
- Joint and several liability: Both siblings are 100% liable for the full loan — not just their share. If one sibling stops paying, the other must cover the full repayment.
- Combined income assessment: Both incomes are used for serviceability — this is the main benefit of co-purchasing.
- Both credit files: The loan appears on both siblings' credit files, affecting future individual borrowing capacity.
- Both must be approved: If one sibling has poor credit or insufficient income, it can prevent the application from proceeding.
First Home Buyer Grants: What Applies?
This is where sibling co-purchase gets complicated. For most first home buyer grants and concessions:
- Both applicants must be first home buyers (never owned property in Australia) for full eligibility
- If one sibling has previously owned, the other may still apply for their share of stamp duty concession — but full exemption typically requires both to be first home buyers
- The First Home Guarantee requires all applicants to be first home buyers — if one sibling has owned before, the pair can't use the First Home Guarantee together
What Your Co-Ownership Agreement Must Cover
Before exchanging contracts, both siblings need a legally drafted co-ownership agreement. Unlike a conversation or a handshake, this document is enforceable and protects both parties. It must address:
- Ownership percentages and how they were calculated
- Mortgage contribution split — who pays what each month
- Usage — does one sibling live there? Do both? Is it rented?
- Maintenance costs — who pays for what repairs and upkeep
- Decision-making — how are major decisions made (renovate, sell, refinance)?
- Exit provisions — what happens if one sibling wants to sell or buy the other out? At what price and on what timeline?
- Life events — marriage, children, death, disability — all must be addressed
Planning Your Exit Before You Enter
The most common failure point in sibling co-purchases is the exit: one sibling wants to buy their own home and needs to sell their share, but the other sibling can't afford to buy them out. Without a clear exit plan, this leads to stalemate, or forced sale.
Consider building these provisions into your co-ownership agreement:
- Right of first refusal: If one sibling wants to sell, the other gets first option to buy at independently valued market price
- Forced buyout timeline: If the remaining sibling can't complete the buyout within 90 days, the property goes to market
- Minimum hold period: A 3–5 year minimum before either sibling can trigger a sale, to avoid forcing a sale in a down market
Frequently Asked Questions
our broker team helps siblings and family groups across South West Sydney structure their co-purchase correctly. Call 0432 634 648 to discuss your situation.
Related: Co-Purchase Guides
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