Buying Property with Family & Friends: Complete Guide

Buying a property with siblings or close friends can get your foot in the door, but due diligence is advised.

ALAND knows that buying your first home is a big step. We go above and beyond to provide affordable, quality apartments in well-connected places where people want to live.

Thankfully, the federal government is also doing its bit to make buying your first home just that little bit easier.

On July 1 this year (2023) the government announced changes to the Home Guarantee Scheme which mean that friends and relatives can now band together to buy a home.

As part of this overhaul the definition of a “couple” has been changed from meaning those in a married or de facto relationship to “any two eligible individuals”.

This opens up the criteria to include siblings, a parent and a child, or two friends who want to pool their resources.

People who have previously owned a home will also be eligible, on the provision they haven’t owned one in the last 10 years.

Under the scheme, the federal government acts as a guarantor which allows people to buy a house with a deposit as low as 5% and avoid paying costly lenders mortgage insurance.

Australian permanent residents will also be eligible for the schemes, rather than just citizens.

The Federal Minister for Housing Julie Collins says the government was “moving to meet the times”.

“We know friends and family members are already teaming up to secure their own place to call home,” she said. “Our actions will allow them to access vital assistance, just as couples have been able to previously.”

In total, 35,000 first homebuyer spots are available each year, with 10,000 for the regional first homebuyer guarantee scheme, and 5,000 for the family home guarantee. [1]

How it works:

The scheme helps low and middle-income people buy their first home sooner, by reducing the amount of deposit they need to save and eliminating Lender Mortgage Insurance (LMI) costs.

Typically, to avoid paying thousands in LMI fees, a borrower needs a 20% deposit. However, under the scheme, even with a 5% deposit, you avoid LMI fees since the government will guarantee up to 15% of the value of the property.

Moreover, eligible buyers will be able to use the scheme together with other government programs such as the First Home Super Saver Scheme, state and territory First Home Owners’ Grant and stamp duty concessions. [2]

Before you go rushing in and sign up for a home with your family or friends, it’s best to consider this list of pros and cons:


  • Your borrowing capacity will be higher when purchasing with a relative or friend
  • You can get into the property market sooner
  • You don’t need to save 20% deposit, with the Federal Government being the guarantor for 15% of the loan
  • All the running costs, maintenance and repairs, rates etc can be split between owners. This means that the ongoing costs of home ownership are more affordable for many


  • There are only 50,000 places, which is not nearly enough to meet demand, with 35,000 first-home buyer spots available each year, 10,000 for the regional first homebuyer guarantee, and 5,000 for the family home guarantee
  • A lot of due diligence is needed to ensure this is the right decision
  • There is a risk that the relationship between buyers may break down
  • You may be pressured to take on the financial burden of the other buyer if they fall into financial hardship.
  • It may be difficult to move out or sell the property
  • Potential credit score damage if the other party defaults on the loan. [3]

Am I Eligible for First Home Guarantee?

There are several eligibility criteria first home buyers must meet to qualify for the First Home Guarantee:

  • A minimum deposit of at least 5% is needed (most lenders require the deposit to have been accumulated through genuine savings).
  • Australian citizens or permanent residents who are at least 18 years of age and hold a Medicare card are eligible.
  • Single first-home buyers earning up to $125,000 a year or couples earning up to $200,000 a year are eligible. Income from the financial year preceding the year in which the loan is entered into will be assessed.
  • Couples, friends, siblings, and other family members can apply for the scheme together.
  • Loans under this scheme require scheduled repayments of the principal of the loan for the full period of the agreement. Interest-only repayments for a specific period are accepted only for loans relating to both the purchase of vacant land and the construction of a house on the land.
  • Applicants must be first-home buyers or buyers who have not owned a property in the past 10 years.
  • Applicants must intend to move into and live in the property as their principal place of residence (they must be owner-occupiers).

Apart from the 5% deposit required, first-home buyers must also provide evidence that they have funds to cover stamp duty, legal fees, bank fees etc., where the loan-to-value ratio is above 95% of the property value.  [4]


[1] The Guardian

[2] Home Loan Experts

[3] The Property Tribune

[4] Home Loan Experts