How do I go about buying a property with a family member or friend?
You will only be getting one first home owners grant. Even if both of you are eligible to receive the first home owners grant of $7000, as you are making a joint home loan application you will only be entitled to one grant amount.
Keep the relationship equal. An important factor in the success of co-borrowing is to maintain an equal and strong relationship with your fellow borrower. Therefore make sure each of you is responsible for an equal 50-50 share in the property and that you have a legally binding contract.
Consider a co-ownership agreement. A co-ownership agreement can cover things such as maintenance, payment for any damages and each person’s capital gains liability. It will also include details of what is to happen if one person defaults on their loan payment; typically if one person defaults the other person can be liable for all of the repayments and you may want to be able to take power of attorney in this case so you can refinance or sell, or you may want to make sure you are not held responsible by the lender for the repayments if your co-borrower has lost their job or become unable to work. A co-ownership agreement can also cover you in the event that the relationship between you and your co-borrower breaks down because details of such a situation will be in your agreement and can save you on costly litigation.
A co-ownership agreement will need to be obtained from your solicitor. A co-ownership agreement is not a standard part of a home loan contract and will need to be organised in addition to your home loan application.
