Time to read : 4 Minutes

Inspired by an inquiry from Expert Analysis reader Ingrid, we take a look at ways to own your own place if you don’t have a partner.

We all know buying your first home is getting harder. According to CoreLogic, home prices rose over 8% in 2023. The experts seem to agree that property prices in Australia are ‘getting back on track’ - and we all know this means they’re going up again. 

With the average house price at $925,400 (according to Trading Economics data), the average home loan (at 80%) would be $740K, and change.

Assuming you have your deposit of $185K and you’re not borrowing to cover your stamp duty (which is a big assumption when you’re looking at upwards of $30,000 for stamp duty in some states ), your repayments are still going to be steep.

If we take an average basic variable home loan interest rate of 6.6%, you’re looking at repayments of $4,726 a month - and we haven’t factored in any living costs at all, or insurances. You will certainly require home and contents insurance if you have a home loan.

All of this maths makes it clear that one income often isn’t enough to buy your own home, which is why so many people buy property together - but do you actually need to couple up to own your own home?

Joint Tenants:

‘Joint Tenants’ is the default description on most home sale contracts and title deeds, as most homes are bought by couples and/or families.

Joint tenancy means you both have an equal interest in your home, and this is listed on your property title (i.e. 50% is yours, and 50% belongs to the other party). There’s no other way to split your property ownership; it’s half each.

If your property is sold at any stage, the proceeds are divided accordingly. So, you’ll both receive half of the sale price (minus any debt that has to be paid out). 

The main feature of purchasing a home as joint tenants is the right of survivorship. This means that if one of you dies, the property automatically passes to the surviving joint tenant, regardless of any instructions left in the deceased person’s Will. Any debt (i.e. the mortgage) attached to the asset also passes to the other joint tenant .

The Right of Survivorship:

A legally valid right of survivorship in a joint tenancy arrangement supersedes your Will. If you purchase your home as joint tenants with your spouse, full ownership of your property passes to the surviving spouse when one of you dies. 

This holds up even if you divorce your spouse and remove them from your Will later on because, while they’re no longer your spouse, they’re still a ‘joint tenant’ on the title deed of your jointly owned property. When a right of survivorship is in play, the property isn’t considered part of the deceased person’s estate.

This is important when you update your Will - and this is definitely something worth doing once you own a valuable asset like a house, apartment, or block of land - and when you take on a large debt like a mortgage. We strongly recommend consulting your legal and/or financial advisor before doing either.

Why? 

Because severing a joint tenancy later on is a complex, expensive and legally messy business - just ask anyone who’s ever been divorced.

Joint tenancy is generally easier for life partners who usually share ownership of their assets. 

What if you’re keen to get your foot on the property ladder before prices climb even further - and you’re happily single and want to stay that way?

Don’t call it quits just yet.

There’s another way to buy a home that doesn't involve finding a significant other, or borrowing from your parents. If you can’t get on the property ladder alone you might want to consider buying with family members or even with friends.

‘Tenants in Common’ is one that’s growing in popularity. It sounds similar to joint tenancy but there are a few major points of difference.

Tenants in Common:

Tenants in common involves co-ownership of your property, with defined shares, which can be equal or unequal. 

For instance, one co-owner may possess a 99% interest in your property, while the other can hold 1%. The associated debt is allocated accordingly.

Unlike the joint tenancy arrangement, there’s no right to survivorship. If your co-owner passes away, their share of the property doesn’t automatically transfer to you.

They can leave it to whomever they wish in their Will, and the person who inherits will co-own the property with you. Each tenant in common has the freedom to sell or bequeath their interest in their part of their property as they see fit.

Tenants in Common is becoming more popular among owner-occupiers as family members - not necessarily parents - are looking at ways to help their kids or grandkids buy their own home. It can be used by siblings or friends, as long as your lender allows this. 

The main attraction is flexibility; if you own a home with your sister and she gets married and wants to move out, you can buy her out of the property, or move her husband in and she can split her interest in the property with him, meaning he becomes responsible for part of the mortgage and his name is added to the title, etc. 

Again, getting your own independent legal and financial advice is important. A comprehensive co-ownership agreement can help prevent expensive legal disputes in the future. Your agreement ought to clearly define the rights and responsibilities of each co-owner, and address aspects such as:

• occupancy arrangements, 

• repayment details, 

• what happens when one co-owner wishes to sell while others don’t. 

Agreeing on these specifics upfront ensures your purchase can proceed as smoothly as possible. It’s a lot easier to redraft your co-ownership contract than to alter a registered title deed with the land titles registry office in your state.

The bottom line:

• It’s clear that if you’re looking to own your own place these days, a single income isn’t going to cut it.

• The traditional way to buy a home is with your partner, but these are also getting harder to find.

• A Tenants in Common arrangement gives you more options for purchasing a home with other people besides a spouse or long-term partner.

• The arrangement also has more flexibility for exiting the agreement down the track.

• Always seek your own legal and financial advice before entering into a home loan contract, and consider a legally drawn-up co-ownership agreement.