Resources · For buyers

Co-Ownership in Australia Under the 2027 Tax Rules

27 October 2026 · AgentBridge · Tax Reform Act 2026

What changes on 1 July 2027

Rule	Was (Before the 2026 tax reform)	Now (Tax Reform Act 2026)
CGT discount for each individual co-owner	50% discount on each owner's share held 12 months or more	Indexation of each owner's cost base plus a 30% minimum tax for each resident individual, for CGT events from 1 July 2027
Gain built up before 1 July 2027	Covered by the 50% discount	Keeps the 50% discount, measured by a deemed sale at market value just before 1 July 2027 or a draft apportioning method
Trusts and companies as co-owners	Trusts: 50% discount passed to beneficiaries; companies: no discount	Trusts get indexation to the extent a gain flows to resident individual beneficiaries, who can pay the minimum tax on it; companies are unaffected apart from pre-CGT property
Rental losses on a jointly owned established dwelling	Each owner deducts their share against other income	From 2027-28, quarantined unless the dwelling was last acquired before 7.30 pm ACT legal time on 12 May 2026 or is new
Death of a co-owner or relationship breakdown	No special rule	The Treasury Laws Amendment (Tax Reform No. 2) Act 2026 preserves a dwelling's grandfathered or new-dwelling status for a surviving spouse, after a relationship breakdown and, where both interests already had it, on a co-owner's death

Affects: Co-owners who are resident individuals, trusts or partners and sell their share from 1 July 2027; co-owners renting out an established dwelling last acquired after 7.30 pm ACT legal time on 12 May 2026; co-owners holding pre-CGT property; and co-owners whose share passes on death or after a relationship breakdown. Everything else is unchanged.

Previous edition (Before the 2026 tax reform)Buying Property With a Partner, Friend or Family Member: Ownership Structures Explained

Co-Ownership in Australia Under the 2027 Tax Rules

Buying property with another person is common in Australia. Couples pool incomes to reach a deposit faster. Friends and siblings team up to get into markets a single salary can no longer reach. Parents buy alongside adult children and investors combine funds to buy a property neither could afford alone. Each arrangement is workable and each rests on decisions that are easy to skip in the rush to settle.

This edition is written as at 27 October 2026. It replaces our two earlier co-ownership guides, which were written before the capital gains tax (CGT) and negative gearing changes passed in June 2026. The ownership, lending and exit material that is still current is carried over here.

What Changed

The Treasury Laws Amendment (Tax Reform No. 1) Act 2026 received Royal Assent on 26 June 2026 as Act No. 49 of 2026. For CGT events from 1 July 2027, it will replace the 50% CGT discount with cost base indexation for resident individuals, trusts and partners, plus a 30% minimum tax for resident individuals. Gains built up before that date will keep the old discount treatment. From the 2027-28 income year, rental losses on established dwellings last acquired after 7.30 pm ACT legal time on 12 May 2026 will be quarantined.

For co-owners the key point is that these rules will apply owner by owner. Each co-owner will work out their own gain on their own share, so two people on the same title can end up with different tax outcomes from the same sale. A second Act, the Treasury Laws Amendment (Tax Reform No. 2) Act 2026, assented to on 26 August 2026, deals with what happens to a dwelling's status on death or relationship breakdown. Until 1 July 2027 the existing CGT rules continue to apply to sales.

The Two Main Ways Co-Owners Hold Title

When two or more people own property together in Australia, they hold title as joint tenants or as tenants in common. The choice is recorded on the certificate of title and is one of the most consequential decisions in the purchase. It is not about who lives in the property or who pays the mortgage; it is about the legal nature of each person's interest and what happens to it when an owner dies.

Joint Tenants

Joint tenants hold the whole property together, in equal, undivided shares. No owner has a distinct portion they can point to, whatever each contributed.

The defining feature is the right of survivorship. When one joint tenant dies, their interest passes automatically to the surviving owner or owners, outside the deceased's will and estate. This is why joint tenancy often suits couples who intend the survivor to take the whole property.

Tenants in Common

Tenants in common hold defined shares, which can be equal or unequal: 50/50, 70/30 or any split that reflects contributions or intentions. Each share is a distinct asset that can be sold, mortgaged or left by will.

There is no right of survivorship. When a tenant in common dies, their share passes under their will or under the intestacy rules if there is no will. Friends, siblings, business partners and parent-child purchases more often use this structure, so each person's share goes to their own beneficiaries.

Three Examples

A couple buys a home as joint tenants. One dies and the other becomes sole owner without the property passing through the estate.

Two friends buy an investment property as tenants in common, 50/50. One dies and their share passes under their will, perhaps to someone not on the title. The surviving friend now co-owns with whoever inherits the share.

A parent contributes most of the price for a property bought with an adult child and they register as tenants in common 80/20. The contribution is recorded on the title and if the property is sold the proceeds split 80/20.

The right structure depends on the relationship, the contributions, the intent and each owner's estate planning. It is a legal decision for your solicitor or conveyancer and the tax consequences below are a question for your accountant.

Tax: What the 2027 Rules Change for Co-Owners

This section describes the rules in general terms. How they apply depends on each owner's residency, income and use of the property, so treat everything here as questions for your accountant.

Each Co-Owner Has Their Own Gain

The ATO's Guide to capital gains tax 2026 states that joint tenants are each treated as owning an equal interest as if they were tenants in common and that each co-owner makes a capital gain or loss in line with their interest. Tenants in common work out their gain on their recorded share. For joint tenants, that means an equal split for CGT even where one owner contributed more.

CGT Events From 1 July 2027

For CGT events from 1 July 2027, the Act will replace the 50% discount with indexation of the cost base for resident individuals, trusts and partners. It adds a 30% minimum tax that will apply to resident individuals only. The Act describes the minimum tax as ensuring that, before offsets, the post-2027 capital gain bears tax at a rate of at least 30%; it will work as a top-up where an owner's ordinary tax on that gain would be lower. Recipients of the age pension and some other payments are exempt if they receive a payment in the income year of the sale.

Because each co-owner is assessed on their own share, an owner on a high income and an owner on a low income can be affected very differently by the same sale. Gains that keep the old discount (the pre-2027 portion and gains on new residential dwellings) will sit outside the minimum tax.

The Gain Built Up Before 1 July 2027

If you bought before 1 July 2027 and sell after it, your interest will be deemed to be sold just before 1 July 2027 and reacquired on 1 July 2027. The gain to that point will be deferred until you actually sell and the old 50% discount rules will apply to it. The later gain will be taxed under the new rules. If you bought between 20 September 1985 and 21 September 1999, the current choice of frozen indexation instead of the discount will end for sales from 1 July 2027.

By default, the deemed sale proceeds will be the market value just before 1 July 2027. Instead, you will be able to choose an apportioning method set by the Minister, at lodgment for the year of sale. As at 27 October 2026 that method is still a draft: Treasury released a draft Determination for consultation in August 2026 and no final Determination has been registered on the Federal Register of Legislation. The draft assumes constant compounding growth over the ownership period and is limited to real property and assets without a readily ascertainable market value. A valuation around 30 June 2027 gives co-owners a dated figure to compare against the method later; ask your accountant what evidence they would want on file.

Trusts, Companies and Self-Managed Super Funds as Co-Owners

Trusts. The explanatory memorandum states that indexation will apply to a trust to the extent the capital gain is relevant to individual beneficiaries who are Australian residents. The trust will not pay the 30% minimum tax itself, but a resident individual beneficiary can, on a post-2027 gain distributed to them. Separately, the ATO notes that the Government announced in the 2026-27 Budget a 30% minimum tax on discretionary trusts from 1 July 2028. That measure is now in the Treasury Laws Amendment (Tax Reform No. 3) Bill 2026 and a related rates Bill, introduced to Parliament on 14 October 2026, and is not yet law.

Companies. Companies never had the 50% discount. The explanatory memorandum states that companies, superannuation funds and life insurance companies will not receive the new indexation or be affected by the related minimum tax. The exception is pre-CGT property, below.

Self-managed super funds. Super funds will be outside the indexation and minimum tax changes. The same Act separately limits new limited recourse borrowing by self-managed super funds over real property to business real property, from 10 August 2026, except where the asset is acquired under an arrangement entered into before that date. Co-owning with an SMSF raises its own structural and borrowing rules; speak to a specialist SMSF adviser and accountant before any arrangement involving a fund.

Pre-CGT Property

Property acquired before CGT began on 20 September 1985 has been exempt. The Act removes that exemption for every type of owner, including companies, from 1 July 2027. The explanatory memorandum states that gains accrued before 1 July 2027 on these assets continue to be exempt, so only growth from that date will be taxed. If a family property bought before 1985 is co-owned, each owner should ask their accountant how the change applies to their share.

Rental Losses on a Jointly Owned Dwelling

Unless the dwelling is grandfathered or new, from the 2027-28 income year net losses on a residential dwelling held to rent out will no longer be deductible against other income; each owner's share will become a "quarantined amount". Dwellings last acquired before 7.30 pm, by legal time in the ACT, on 12 May 2026 are grandfathered. For a contract purchase, ownership starts on the contract date. What counts as a new dwelling is set out in the Treasury Laws Amendment (Tax Reform No. 3) Bill 2026, introduced to Parliament on 14 October 2026, which is not yet law.

If ownership shares change after that time, for example one co-owner buys out another, the explanatory memorandum treats the share bought as a new acquisition that is not grandfathered, unless the transfer follows a relationship breakdown (see below). The buyer's original share stays grandfathered.

Death and Relationship Breakdown

The ATO's co-ownership and right of survivorship page states that when a joint tenant dies, for CGT purposes the deceased's interest is taken to pass in equal shares to the surviving joint tenants. The Tax Reform No. 2 Act 2026 (Act No. 71 of 2026) then preserves a dwelling's grandfathered status for negative gearing and its status as a new dwelling when an interest passes to a surviving spouse or is transferred after a relationship breakdown. When a co-owner who is not a spouse dies, the status carries across only where the survivor's interest and the deceased's interest both already had it. These rules will apply from the 2027-28 income year.

Main Residence

The main residence exemption can reduce or remove CGT on a property that is your home. The Act does not amend those rules, although it relies on them when a gain is split between home and rental use. Where co-owners use the property differently, for example one lives in it while another treats their share as an investment, the exemption may apply to one share and not the other. Rental income and deductible expenses are usually split according to ownership interests.

Land tax is a state tax and was not changed by the Act. The rules for co-owners differ by state. In NSW, for example, Revenue NSW states that joint owners can claim only one land tax threshold for the land they own together. Each joint owner is also assessed separately as an individual.

The Co-Ownership Agreement

A written co-ownership agreement (sometimes called a co-ownership deed) sets out how co-owners deal with each other. It is separate from the title and from the loan: the title records who owns what, the agreement records how the arrangement runs and what happens when things change.

An agreement is not legally required and banks generally do not ask to see one. For friends, siblings and investors it is close to essential, because it is written while everyone is aligned, which is exactly why it works when they are not. A solicitor should prepare or review it.

A strong agreement covers:

Each party's contribution (deposit, stamp duty, settlement costs and any family gifts) and how it maps to ownership shares
How the mortgage, rates, insurance, strata levies, repairs and maintenance are split and what happens if one party falls behind
How major spending is decided and whether the property will be lived in, rented or used as a holiday home
Exit: a first right for the others to buy a departing share and a method for valuing it
Exit triggers: death, separation, default, dispute or a voluntary sale
Dispute resolution, such as mediation, before anyone can force a sale
A record of how income and expenses are tracked for each owner's tax return

Under the 2027 rules it is also worth recording each owner's cost base and, if you obtain one, a valuation as at 30 June 2027, so that each owner's accountant works from the same figures.

How Lenders Treat Co-Borrowers

Holding title together is one thing. Borrowing together is another and it carries a feature that surprises many first-time co-buyers: joint and several liability.

When two or more people take out a loan together, each is liable for the whole debt, not just their share. If one co-borrower stops paying, the lender can pursue the others for the entire balance. That holds even where title is split unequally as tenants in common: an owner of 30% can be liable for 100% of the loan.

The effects reach into future borrowing. When you later apply for finance on your own, lenders generally count the whole joint loan as your liability, while often counting only your share of any rent. A missed payment by a co-borrower can also affect your credit record. Talk to a mortgage broker or lender before committing, since assessment practices vary.

Buying With Family

Money moving between generations can be a gift, a loan or a guarantee and the three are treated very differently.

A guarantor arrangement is where a family member, usually a parent, uses equity in their own property as extra security for the buyer's loan. It can help a buyer borrow with a smaller deposit, but it puts the guarantor's property at risk if the borrower cannot pay. The guarantor should take independent advice.

Parental help often comes as a gift or a loan. A genuine gift is usually documented with a gift letter confirming there is no obligation to repay. A loan is a debt that a lender will generally factor into serviceability. Where parents want their contribution protected, for example on a relationship breakdown, a documented loan agreement or a clear record of the contribution is sensible.

Independent legal advice matters most in parent-child arrangements where contributions are uneven. A solicitor acting for everyone cannot give each party fully independent advice.

What Happens When One Party Wants Out

A co-ownership rarely lasts forever and exit is the most common source of dispute.

A voluntary sale. Where the agreement sets out an exit process, the departing owner offers their share to the others first at an agreed valuation. The others buy it, refinancing as needed or the whole property is sold and the proceeds split by ownership. Selling a share to an outsider is rarely practical. A buy-out is itself a CGT event for the departing owner and stamp duty can apply to the share transferred; check both before agreeing a price.

A contested exit. A co-owner who cannot reach agreement can apply to a court or tribunal for an order that the property be sold or divided: in NSW, the Supreme Court under section 66G of the Conveyancing Act 1919; in Victoria, VCAT under the Property Law Act 1958. It is slow, costly and outside the owners' control.

Death. For joint tenants, the share passes to the survivors. For tenants in common, it passes under the will or by intestacy.

Separation of partners. Family law applies to married and de facto couples. The Federal Circuit and Family Court of Australia considers the assets and liabilities of the couple individually and jointly, so the outcome does not simply follow the title. Time limits apply, so take family law advice early.

Bankruptcy. A bankrupt co-owner's share vests in their trustee in bankruptcy, who can seek a sale to realise it.

Each scenario is easier to manage when the agreement was written with it in mind.

Checklist Before Signing

Joint tenants or tenants in common and if tenants in common, what shares? Do they reflect contributions?
Is a written co-ownership agreement drafted and signed?
Who is on the loan and does each borrower understand they are liable for all of it?
How are costs split and through what mechanism?
What happens if one party wants to sell, dies or falls out with the others?
Is each owner's will consistent with the title structure?
Has each owner's accountant looked at how the 2027 CGT and negative gearing rules apply to their share?
Has each party had independent legal advice?

FAQ

Does each co-owner pay the 30% minimum tax?

The minimum tax will apply to resident individuals, on their own post-2027 capital gain. Each individual co-owner will be assessed separately, so it may apply to one owner and not another. Gains that keep the 50% discount will sit outside it.

Should we buy as joint tenants or tenants in common?

Joint tenancy is common for couples buying a home; tenants in common is common where contributions are unequal or each owner wants their share to pass under their own will. The right choice is a legal decision for your solicitor. For CGT, joint tenants are treated as owning equal shares.

Can we change from joint tenants to tenants in common later?

Generally yes, by severing the joint tenancy. NSW Land Registry Services, for example, accepts a transfer severing a joint tenancy by the unilateral action of one joint tenant. The process differs between states, so ask your conveyancer or solicitor.

What is the stamp duty position if one co-owner buys out the other?

Duty usually applies to the share transferred, on its value. Some states have concessions for transfers between spouses or on a family law settlement. Confirm with your conveyancer before agreeing terms.

About AgentBridge

AgentBridge gets your property in front of the people who represent serious buyers. One brief, matched to the right agents from 85+ across Australia. Many buyers agents work with co-buyers and can suggest solicitors and accountants experienced in co-ownership.

Sources

General information only, not financial, legal or taxation advice and not credit assistance. Ownership structures, lending, tax and estate matters carry consequences specific to your situation. Speak to your own solicitor, conveyancer, accountant or broker before acting.

Previous editions: Buying Property With a Partner, Friend or Family Member: Ownership Structures Explained (Before the 2026 tax reform)

Thinking of selling?

Tap into 85+ buyers agents across Australia

AgentBridge gets your property in front of the people who represent serious buyers. One brief, matched to the right agents from 85+ across Australia.

List your property More resources