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Friends with housing benefits

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Rapidly increasing house prices in Australia’s capital cities is making it harder for young people to get onto the property ladder.

According to the Australian Bureau of Statistics, the proportion of Australian residents who own their own home has fallen significantly from 41.1 per cent in 1991, down to 31 per cent in 2016. And over the same period, the proportion of renters has grown from 26.9 per cent to 30.9 per cent.

Many people are choosing to invest as tenants in common, sharing the cost of entering the property market.

Friends with housing benefits crazyegg


Real Estate Institute of Queensland (REIQ) CEO, Antonia Mercorella, explained how tenants in common works.

“In Queensland there are commonly two main types of property ownership – tenants in common (TIC) or joint tenants (JT),” she said.

“Usually married couples own property as joint tenants.

“A tenants in common ownership arrangement can be established as a way to reflect the financial contribution of each party to the purchase.

“For example, if one person contributes 70 per cent of the purchase price and the other contributes 30 per cent, the ownership structure can reflect that, with one person owning 70 per cent of the property while the other person owns 30 per cent.”

Groups investing as tenants in common could be friends, siblings, workmates, or parents and children purchasing property together.

Ms Mercorella added there could be some complications to the arrangement.

“What happens to the property after one person dies is a key difference between tenants in common and joint tenants,” she said.

“Under TIC, if one person dies their share is passed to their heirs, rather than the surviving partner. Also under TIC, one partner can mortgage their share or even sell their share without the other person’s permission.

“But tenants in common can be a good way for groups to buy property together as long as everyone is aware of the potential outcomes at the beginning and is prepared for all eventualities.”

Brisbane solicitor Mark Askin purchased an investment property in August 2021 with a good friend as tenants in common.

“My mate and I had known each other for 10 years and at that time, I had separated from my long-term partner,” Mr Askin said.

“Whilst we were deciding what to do with our house, I needed a place to live, so I purchased the property with my friend as an investment for both of us and also a place to live for me.

“It was a fairly easy decision to make, based on the price of the property and our incomes at the time.”

The pair held onto the property for five years before selling.

Investing as tenants in common had added benefits for Brisbane lawyer Khilen Devani and his group of friends.

“In 2008, three of us – all friends – bought an apartment in Queenstown, New Zealand,” he said.

“One of my mates was holidaying in Queenstown at the time and came across the opportunity.

“Our motivations were investment driven, but it also provided tax benefits and a great excuse to escape to Queenstown.”

Mr Devani said the group held on to the property for six years.

“Buying as a group meant that the initial outlay was manageable and the risk was shared,” he said.

“Plus the admin work involved in holding an investment property was also shared.”

DHA’s Director of Sales Chris Perry agrees that a tenants in common arrangement may be a way for young people to get into the property market.

“Choosing to invest with family or friends as tenants in common is one way to break into the property market,” he said.

“As long as all parties understand what they are entering into and have discussed what they would do in a range of scenarios it can be an option for investors that aren’t able to purchase a property on their own.”





This article provides general information which is current as at the time of production. The information contained in this communication does not constitute advice and should not be relied upon as such as it does not take into account your personal circumstances or needs. Professional advice should be sought prior to any action being taken in reliance on any of the information.

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