One of the best ways to make buying a property more affordable is to buy it with another person. Your partner, a sibling, a friend, a parent etc. and with that, there are several important things for you to consider.
Type of ownership
When you choose to buy a property with another person or several people there are two options.
Joint tenants – as owners you own the whole of the property together and is generally used for couples. The right of survivorship applies so that if one owner passes the ownership is transferred to the surviving owner.
Tenants in common – shares in the property can be equal or unequal in size. If any of the tenants was to pass away the share is to be dealt with as part of that individual’s will and estate.
When you are buying a property and one or more of the buyers are foreign you need to apply to the Foreign Investment Review Board for approval. When the purchase is as tenants in common then application fees and a foreign surcharge duty may be payable. If you are buying with your spouse then the circumstances change as you will be joint tenants. Ensure you have professional advice based on your circumstance.
When you are investing in property with another person is wise to get tax advice. Getting tax advice first ensures that you are maximising any future tax deductions relevant to the property when it is an investment. Only your taxation professionals can provide advice as they know your circumstances.
If you choose to buy a property as tenants in common with another person it is smart to create a simple legal agreement. This legal agreement can cover the rights and obligations of each of the owners of the property.
So, should you buy a property with another person
When you are buying a property it is important to look after yourself legally and financially. If you would like specific advice tailored to your circumstance please contact Select Conveyancing Lane Cove.
Note: Every circumstance is different so this article is only general information not specific to any one purchase.