Co-Ownership Agreements When Buying Together in Victoria

Two names on the title can feel like enough, until someone’s plans change and there’s no written agreement to fall back on.

The short answer: A co ownership agreement is a separate written deed between people buying property together in Victoria. It records who contributed what, who pays which costs, and what happens if one owner wants to sell, defaults, dies, or can no longer keep contributing. Without one, a co owner dispute can end up at VCAT under the Property Law Act 1958 (Vic), where sale and division of the property may be ordered.

Is being on the title enough when buying with someone else?

Being on the title records ownership, but it doesn’t record the private deal between you. In Victoria, the title shows whether you hold the property as joint tenants or tenants in common, and whether any tenants in common hold equal or unequal shares.

That still leaves big questions unanswered. The title usually won’t explain who paid the larger deposit, who is living in the property, who pays the owners corporation fees, or what happens if one person wants to move out after 18 months.

A co ownership agreement fills that gap. It sits beside the contract of sale, loan approval and transfer documents. It doesn’t replace the title; it explains the rules between the people on it.

We’ve seen this come up most often when two people contribute unequal deposits but go on title in equal shares because the purchase was moving quickly before auction. That might feel fine on signing day, but it can become a serious dispute when the property is sold and each person expects a different share of the proceeds.

What does a co ownership agreement cover?

A good Victorian co ownership agreement sets out the money, the responsibilities and the exit plan. It should be clear enough that each owner can read it later, without needing to reconstruct years of payments from bank statements.

Common inclusions are:

each buyer’s deposit contribution
whether contributions came from savings, a gift, inheritance, or another source
each owner’s agreed ownership share
who pays the mortgage, rates, insurance and owners corporation fees
who pays for repairs, maintenance and capital works
what happens if one owner stops paying
how a buyout price will be calculated
when the property must be sold
what happens if an owner dies, becomes bankrupt, or loses capacity

For a Brunswick townhouse, a Southbank apartment, or a family home in the outer east, the document should be practical. It should answer ordinary questions before they become emotional ones.

Joint tenants or tenants in common: what is the difference?

Joint tenancy means the surviving owner automatically takes the whole property if one owner dies. Tenants in common means each owner has a defined share, which can pass through their estate.

That choice matters. Couples often buy as joint tenants because the survivorship rule suits their plans. Friends, siblings, blended families and parent child buyers often prefer tenants in common because each person’s share can be recorded separately.

A co ownership agreement should match the title structure. If you hold 70 per cent and your sibling holds 30 per cent, the title and agreement should not tell two different stories. If the title is held equally but the contributions are not equal, the agreement should explain how that imbalance is treated when the property is sold or refinanced.

When should you get a co ownership agreement?

You should consider a co ownership agreement before signing the contract, or at least before settlement. It is much easier to agree on the rules while everyone is excited and cooperative than after one owner has lost their job, started a new relationship, or decided they want their money back.

It is especially useful where:

friends are buying together to enter the Melbourne market
siblings are buying a home and only one will live there
parents are helping an adult child by going on title
unmarried partners are buying before formalising long term plans
buyers are contributing unequal deposits
one buyer is claiming a first home buyer benefit and the other is not
the property is an investment, rather than everyone’s home

A deed is not just for worst case thinking. It can protect the relationship because everyone knows the rules from the start.

What happens if one co owner wants to sell?

The agreement should set out a clear exit process before anyone needs it. The most common option is a first right of refusal, meaning the owner who wants to stay has the first chance to buy out the owner who wants to leave.

A fair exit clause usually covers:

How notice must be given.
How the property will be valued.
How long the staying owner has to complete the buyout.
What happens if finance is not approved.
Whether the property is then sold by auction or private sale.
How agent’s fees, conveyancing costs and sale proceeds are split.

For Melbourne properties, valuation can be sensitive. One owner may point to a strong auction result around the corner; the other may focus on defects, owners corporation costs, or market conditions. A deed can avoid that tug of war by naming an agreed valuation method, such as one independent valuer or two valuations averaged together.

What happens if there is no co ownership agreement?

If co owners cannot agree, the dispute may move to VCAT under the Property Law Act 1958 (Vic). VCAT can deal with disputes where one co owner wants to sell and another does not, where owners cannot agree how to sell, or where they disagree about how sale proceeds should be divided.

That process can still involve stress, evidence and cost. You may need to prove who paid the deposit, who paid the mortgage, who funded repairs, and whether one owner received more than their fair share.

A co ownership agreement does not remove every possible dispute, but it gives everyone a written starting point. Instead of arguing from memory, you can point to the agreed rule.

How does co ownership affect first home buyer benefits in Victoria?

A co ownership agreement does not change stamp duty, but it can record how duty savings and risks are shared. In Victoria, the first home buyer duty exemption applies to eligible homes with a dutiable value up to $600,000, and a concession may apply from $600,001 to $750,000.

The State Revenue Office rules need careful checking when buyers are not in the same position. If one buyer has owned property before, or if a spouse or partner has owned residential property in Australia, the result can change. At least one eligible purchaser must also occupy the home as their principal place of residence for 12 continuous months, starting within 12 months of settlement.

Your agreement can record who is meant to move in, who receives the benefit of any duty saving, and what happens if the residence requirement is not met. The deed should not try to rewrite the tax rules. It should record the private deal between co owners in a way that sits safely beside the duty assessment.

What should your conveyancer check before settlement?

Your conveyancer should raise co ownership early, preferably during the Section 32 and contract review. Waiting until the week before settlement can make the deed harder to organise, especially if a lender, guarantor or family member is involved.

Before settlement, your conveyancer should help you work through:

whether the title should be joint tenants or tenants in common
whether ownership shares should be equal or unequal
who is on the loan and who is only on title
whether a parent contribution is a gift, loan, or ownership interest
how first home buyer duty rules apply
whether each buyer needs separate legal advice
whether the agreement matches the contract, transfer and loan documents

If the co owners have different interests, independent advice may be needed. That is not a roadblock. It helps make sure everyone understands what they are signing.

Common mistakes to avoid when buying together

The biggest mistake is assuming goodwill will solve everything later. Goodwill helps, but it is not a plan.

Watch out for these common traps:

going on title 50/50 when deposits are not equal
treating a parent contribution as a casual gift when the parent expects repayment
failing to agree who pays for major repairs
not deciding what happens if one owner moves out
ignoring death and estate planning
assuming the bank’s loan documents record the deal between co owners
leaving the deed until after settlement

The bank’s concern is repayment of the loan. Your co ownership agreement is about fairness between the owners. Those are related, but they are not the same thing.

Frequently asked questions

What is a co ownership agreement when buying property in Victoria?

A co ownership agreement is a written deed between two or more people buying property together in Victoria. It records each person’s contribution, ownership share, ongoing costs and exit rights. It sits beside the title and contract of sale, but it is a private agreement between the co owners.

Do I legally need a co ownership agreement to buy with a friend?

No, Victorian law does not require you to have a co ownership agreement before buying with a friend. You can go on title without one. The risk is that, if you later disagree, you may need VCAT or court orders to sort out sale, division of proceeds, or contribution issues.

Can a co ownership agreement change my stamp duty position?

No, a co ownership agreement does not change how duty is assessed in Victoria. Duty is assessed by reference to the transaction, title structure, eligibility and State Revenue Office rules. The agreement can record how the co owners will share duty costs, duty savings and any risk if a first home buyer requirement is not met.

What happens to a co ownership agreement if one of us dies?

The result depends on whether the property is held as joint tenants or tenants in common. Joint tenancy usually means the surviving owner takes the deceased owner’s interest automatically. Tenants in common means the deceased owner’s share forms part of their estate, so the agreement should include a buyout process for the surviving co owner and the estate.

Can VCAT override a co ownership agreement?

VCAT can make orders about co owned land under the Property Law Act 1958 (Vic), including sale and division of proceeds. A clear co ownership agreement can be strong evidence of what the parties intended and agreed. VCAT still has to deal with the dispute fairly under the law, so the deed should be properly drafted and signed.

Can I add a co ownership agreement after settlement?

Yes, co owners can sign an agreement after settlement. The problem is timing. Once money has been paid, one person has moved in, or the relationship has changed, it can be harder to agree on fair terms than it would have been before settlement.

About the Pearson Chambers Conveyancing team

The Pearson Chambers Conveyancing team works with Melbourne buyers across houses, apartments, townhouses and off the plan purchases. We regularly help first home buyers understand Section 32 statements, contract terms, title structures and settlement risks before they sign. Co ownership is one of the practical issues we raise when buyers are purchasing with siblings, friends, parents, or partners.

Sources we consulted

Buying together? Get the contract checked before you sign

If you’re planning to buy with a sibling, friend, parent, or partner, the Pearson Chambers Conveyancing team can review the contract and Section 32 statement, then talk you through whether a co ownership agreement should be arranged before settlement.

Contact Pearson Chambers Conveyancing for a complimentary Section 32 contract review.

Email: contact@pearsonchambers.com.au

General information only, current as at the date of publication. Victorian conveyancing rules and legislation change frequently. Please contact the Pearson Chambers Conveyancing team for advice on your specific contract.