In many multicultural households — particularly Lebanese, Indian, Vietnamese, Chinese, and Pacific Islander communities — it's common for extended families to pool resources to buy property together. Two couples, two sets of parents, or a mix of related families combining their savings and borrowing power to purchase a home or investment property.
This is legally possible and lenders can accommodate it. But without the right structure upfront, it can become a financial and personal disaster. This guide covers what works, what doesn't, and how to protect everyone involved.
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Ownership Structures: Tenants in Common vs Joint Tenants
When two families buy together, the most important decision is how the property is owned on title. There are two options:
Joint Tenants
Both parties hold an equal, undivided share. If one person dies, their share automatically passes to the surviving owner (right of survivorship). This structure is typically used by married couples — not by two separate families, because it doesn't allow unequal shares and the survivorship rule can create estate complications.
Tenants in Common (Recommended for Two Families)
Each family holds a specified share of the property — which can be unequal. For example, Family A contributes 60% of the deposit and holds 60% share; Family B holds 40%. When one owner dies, their share passes through their estate (not automatically to the other owner). Shares can be sold or transferred independently.
The Co-Ownership Agreement: Non-Negotiable
Before exchanging contracts, both families must have a legally drafted co-ownership agreement (sometimes called a co-habitation agreement, property sharing agreement, or tenancy in common deed). This document should cover:
- Ownership percentages — who owns what share and how it was calculated
- Contribution to purchase — who contributed what to the deposit and costs
- Mortgage contributions — who pays what share of the monthly repayments
- Usage rights — if one family lives there and the other doesn't, how is that managed?
- Maintenance and expenses — who pays for what ongoing costs
- Decision-making — what happens if the two families disagree on renovation, renting, or selling?
- Exit provisions — what happens if one family wants to sell? Is the other family given right of first refusal? At what price?
- Death or incapacity — what happens if a key borrower dies or can no longer contribute?
This agreement must be drafted by a solicitor — not a template downloaded off the internet. Cost: typically $1,500–$3,000. Skipping it costs far more when things go wrong.
How the Mortgage Works with Four Borrowers
Most lenders allow up to 4 borrowers on a single home loan. This means two couples (four people total) can all be on the loan. There are important things to understand about how this works:
- Joint and several liability: Every borrower is 100% liable for the entire loan — not just their share. If one family stops paying, the other must cover the full repayment or risk the lender taking action against all borrowers.
- Serviceability: Lenders will assess all four borrowers' combined income, but will also look at each individual's ability to service the loan if others default.
- Credit checks: All four borrowers are credit checked. One person with bad credit can sink the whole application.
- Future borrowing impact: All borrowers will have this loan on their credit file, which affects their ability to borrow individually in the future.
Tax and Stamp Duty Implications
When two families buy together, the tax implications apply to each family's share:
- Stamp duty: Calculated on the full purchase price, but each family's liability reflects their ownership share
- Land tax: Both families' other property holdings may be aggregated for land tax threshold purposes — speak to an accountant
- Capital gains tax: Each family pays CGT on their share of any profit when they sell
- First home buyer concessions: Only applies to families who have never owned property before — and only for the purchasing family's share
When It Works Well — and When It Doesn't
| It Works When… | It Fails When… |
|---|---|
| Both families have stable income and clear mortgage contributions | One family's income is unstable or informal |
| A co-ownership agreement is in place before settlement | No written agreement exists — relying on trust |
| Both families have similar life plans (stay long-term, invest) | One family wants to sell in 5 years; the other wants to hold forever |
| Exit provisions are clear and agreed upon | One family needs cash urgently and the other can't buy them out |
| A broker assesses all four borrowers' financial position together | Application built on one family's income with the other as silent partner |
Buying a House Jointly With Your Parents
The most common version of a joint family purchase isn't two unrelated families — it's buying a house jointly with parents. Adult children and their parents pool incomes and deposits so the family can afford a larger home, get into the market sooner, or buy an investment together. The structure is the same as any co-purchase: parents and children usually hold as tenants in common in agreed shares (for example 50/50, or 70/30 if one side contributes more deposit), and all parties are named on the mortgage as co-borrowers.
Two things matter most when buying property with parents. First, serviceability across different life stages: a lender assessing a loan with retired or near-retirement parents will look closely at how the loan is repaid as parents age — some lenders shorten the loan term or want an exit strategy. A specialist broker matches you to lenders comfortable with mixed-generation applications instead of getting knocked back by a bank that isn't. Second, a written co-ownership agreement is just as essential with family as with strangers — it sets out who pays what, what happens if a parent passes away (does their share pass to the child or to their estate?), and how one side can buy the other out. Handled well, buying with parents is one of the most effective ways for a first home buyer to get into the market; handled on a handshake, it's where family disputes start.
Frequently Asked Questions
our broker team helps families across South West Sydney navigate co-purchase, joint loans, and family property arrangements. Call 0432 634 648 for a free assessment.
Related: Joint & Family Purchase Guides
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