Getting ready
Co-buying with parents
Ownership shares, tenants in common or joint tenants, who lives there, the exit plan, and the duty, land tax and capital gains consequences of co-owning.
Buying together puts a parent on the title. It is the most complete form of help and the one with the most consequences, because a share of a property is not a payment: it is an asset the parent owns, with its own tax position, its own place in their estate, and a future in which someone has to buy it back or sell it. Families who do this well decide the ending before the beginning.
Shares, and the two ways to hold them
Co-owners hold a property either as joint tenants or as tenants in common. Joint tenants own the whole together in equal shares, and when one dies the survivor takes the whole property automatically, regardless of the will. Tenants in common each own a defined share, which can be unequal, and each share passes under its owner's will. A parent contributing part of the price and intending it to be a share of the property is almost always a tenant in common, with the shares recorded on the title in the proportions the family agreed. The choice is made on the transfer document at settlement and it is hard to change later without a further transfer and, often, further duty.
Who lives there, and who borrows
The buyer lives in the home; the parent usually does not. That single fact drives most of the tax consequences. The lender, meanwhile, assesses every owner as a borrower, so a parent on the title is commonly also on the loan, with their income and liabilities in the application and their credit file carrying the mortgage. Some lenders will lend to co-owners on a shared loan; some prefer each owner's share to be financed separately; a broker can say what a given policy allows.
Duty, land tax and capital gains
- Transfer duty is paid on the purchase as a whole, and the first-home concessions in most states depend on the eligibility of every person taking a share. A parent who is not a first-home buyer can cost the child the concession on the whole purchase, or on part of it, depending on the state; the state pages carry each test.
- Land tax is a state tax on land a person owns other than, usually, the home they live in. The parent's share is land they own but do not live in, so it may count towards their land-tax threshold each year; the buyer's share is usually exempt as their principal place of residence — but not always: in NSW, from the 2025 land tax year, an occupier who owns less than 25% of the property is not entitled to the exemption on it, so a small buyer share can lose the exemption the buyer expected. The thresholds and rates are the state's.
- Capital gains tax on a later sale follows the same line. The buyer's share is usually covered by the main-residence exemption because they live there; the parent's share is usually not, so a gain on it is assessable to the parent. Keeping records of the purchase price and costs from day one is what makes that calculation possible.
- Transferring the share to the child later, when the child can afford to buy the parent out, is itself a transfer of an interest in land: duty is commonly payable on the value of the share transferred, and the parent's capital gain is worked out at that point. Some states have exemptions for particular family transfers; most do not for this one.
The exit plan
Every co-ownership ends: the child buys the parent out, the property is sold, or the parent's share passes under the will. Deciding which, and on what terms, at the start is what a co-ownership agreement is for. It records the shares, who pays what towards the loan, rates and repairs, how the property is valued when a share changes hands, who has first right to buy, what happens if either owner wants out, and what happens on death or on the child's separation. A solicitor prepares it alongside the transfer. Without one, the default rules are the state's co-ownership laws and, if the owners cannot agree, a court order for sale.
The parents' side
A share in a child's home is an asset in the parents' own affairs: it counts in Centrelink's assets test if they receive a pension, it sits in their estate, and it is exposed if the parent is ever sued or becomes bankrupt. It is also money the parent cannot easily get back until the exit happens. Those are the reasons the parents' page and an accountant or adviser belong in this decision as much as the lender does.
The questions to settle first
- What shares, and as tenants in common?
- Who is on the loan, and who pays what each month?
- Does the parent's presence on the title affect the first-home concession or grant in this state?
- What is the exit, and how will the share be valued when it happens?
- What does each side's will say about the share?
Sources
- NSW Trustee & Guardian, buying a home (joint tenants and tenants in common) — checked 15 September 2026
- Revenue NSW, land tax principal place of residence exemption — checked 15 September 2026
- Revenue NSW, transfer duty on family transfers — checked 15 September 2026
- Services Australia, real estate assets — checked 15 September 2026
- Australian Taxation Office, eligibility for the main residence exemption — checked 15 September 2026
- Australian Taxation Office, main residence exemption — checked 6 September 2026
- Revenue NSW, transfer duty (as one example of a state's treatment of transfers between family members) — checked 6 September 2026
Last updated 15 September 2026 · draft, awaiting review.