2025-08-06 28Hse Editor
Buying a property with friends or a partner can make home ownership more affordable, especially when your budget is limited. While co-buying is a practical solution, it's essential to agree on property ownership, mortgage terms, and selling conditions upfront to avoid future disputes.
For instance, four property agents recently co-purchased a 523 sq. ft. flat at Double Cove Starview Prime in Ma On Shan for HK$6.08 million, equivalent to HK$11,625 per square foot. The unit had been purchased earlier this year for HK$5 million, meaning the seller made a profit of HK$1.08 million in just three months, a 21.6% increase. However, since the flat was co-owned, after deducting taxes and commissions, each agent earned approximately HK$214,000 in profit.
If you decide to co-buy a property, there are several important factors to keep in mind. First, pay attention to ownership arrangements, which are generally divided into “Joint Tenancy” and “Tenancy in Common”, with the key difference being how the property is inherited.
Joint Tenancy, commonly referred to as a "long-life deed," means that if one co-owner passes away, their share automatically transfers to the surviving co-owners and is not treated as part of the deceased’s estate. In other words, the last surviving co-owner will inherit full ownership of the property. This arrangement is suitable for close relationships, such as couples, to avoid inheritance disputes.
On the other hand, Tenancy in Common divides ownership into specific shares, often based on the amount each party contributed to the purchase. The ownership percentage is clearly stated in the deed. If one owner passes away, their share is handled through probate and distributed according to their will or estate plan.
Regardless of the ownership type, all co-buyers must apply for the mortgage together. At least one person will be the primary borrower, and the bank will evaluate that individual’s income and repayment ability to determine whether to approve the loan.
When applying for a mortgage, all co-buyers must apply together, and at least one person will act as the main borrower. The bank evaluates their income and repayment ability to decide whether to approve the loan. All co-buyers are equally responsible for the repayment. If one party fails to pay on time, the others must cover the shortfall to avoid foreclosure.
Additionally, any co-owner could apply for loans against the property. If repayments are missed, lenders can pursue all owners or even seize the property. Co-buying, therefore, requires trust and mutual financial responsibility to avoid losses.
When it comes to selling the property, Joint Tenancy requires unanimous agreement among all co-owners before the property can be sold. Conversely, with Tenancy in Common, each owner can sell their share independently. However, incomplete ownership may result in a lower selling price. To prevent disputes, it’s crucial to discuss and agree on selling conditions before purchasing the property together.
If disagreements arise and an owner wishes to transfer or remove their name, the process is treated like a standard property transaction. Stamp duty is charged based on the ownership percentage. For example, if an HK$8 million property is split evenly between two parties, the stamp duty would be calculated on HK$4 million.
Like
