Shared Property Ownership in New Zealand: How It Works and What to Know
- Staircase Financial
- 7 hours ago
- 5 min read
Saving for a house deposit in New Zealand is getting tougher. Property prices remain high, living costs continue to rise, and lending rules can make buying on your own more challenging.
Many people find that despite steady saving, purchasing a property alone no longer feels achievable within a reasonable timeframe.
Shared property ownership allows two or more people to buy a property together by pooling deposits, sharing a mortgage, and setting clear ownership rules from day one. With the right legal structure and agreements in place, it can provide an alternative pathway into property while sharing both risk and responsibility.
How shared property ownership works in New Zealand
Shared property ownership involves two or more people purchasing a property together and holding legal ownership in defined shares. Each co-owner contributes to the purchase, typically through a deposit and mortgage repayments, and all parties are recorded on the property title.
How the arrangement functions in practice depends on how ownership is structured, how decisions are made, and what happens if one person wants to exit the investment. These details are usually agreed upfront and set out in formal legal documents.
Shared property ownership is a common approach for first home buyers, friends or family purchasing together, or investors pooling capital to access property they could not purchase alone.
When buying property alone may not suit everyone
Buying alone may feel like the default, but there are situations where it can increase financial pressure or slow progress. Carrying the full deposit, mortgage, and ownership costs alone concentrates both risk and responsibility on one person.
Common assumptions about buying property alone
It is often assumed that buying on your own provides more control and higher reward. In practice, buying solo also means managing all costs, risks, and decisions independently.
Shared property ownership spreads these responsibilities across multiple parties.
While this does not remove risk, it can lower entry barriers and allow buyers or investors to move forward sooner, provided expectations are clear and well documented.
Common ways to invest in property with others
There are several ways to structure shared property ownership. The right option depends on how involved each person wants to be and how the investment will be managed.
Partnering with friends or family
This is a common approach for first-home buyers. Two or more people combine deposits and share a mortgage. It is relatively simple to set up but relies heavily on clear agreements.
Before buying together, make sure you agree on:
How much each person contributes
How ownership shares are recorded
How decisions will be made
What happens if someone wants to sell or stop paying
Banks generally treat all co-owners as jointly liable, meaning each person is responsible for the full loan if another party cannot pay. A written co-ownership agreement helps protect everyone involved.
Starting a property investment group
When multiple investors pool funds and rely on a manager to operate the investment, this may meet the definition of a managed investment scheme under the Financial Markets Conduct Act 2013.
The Financial Markets Conduct Regulations 2014, administered by MBIE, set out the legal requirements for offering interests in these schemes in New Zealand, including registration and disclosure obligations.
Using a company or trust
Some groups choose a company or trust structure. A company reflects ownership through shares, while a trust can support longer-term planning and asset protection. These structures cost more to establish but provide clearer governance and operating rules.
Joining a property syndicate or crowdfunding platform
Syndicates and crowdfunding platforms allow individuals to invest smaller amounts into larger property projects. A professional manager oversees the property, reporting, and decisions. This suits people seeking a more hands-off approach and who are comfortable with reduced control and longer investment horizons.
Pros and cons of group investing
Buying property with others can reduce some barriers to entry, but it also introduces shared responsibility, additional complexity, and risk.
Pros
Lower upfront costs: Pooling deposits can make lenders easier to satisfy and increase buying power
Shared financial burden: Mortgage repayments, maintenance, and rates are divided
Access to broader opportunities: Groups can target properties out of reach for individual buyers
Complementary skills: Different people may contribute budgeting, renovation, or research strengths
Cons
Shared liability: Lenders often hold all co-owners fully responsible for the entire loan
Complex decision-making: Renovations, tenants, and sale timing must be agreed collectively
Relationship strain: Money and property decisions can place pressure on personal relationships
Challenging exits: A departing co-owner may require refinancing, a buy-out, or sale of the property
Legal and financial structures you’ll need
Before buying with others, it is essential to set up clear legal and financial arrangements.
Co-ownership agreements
When purchasing together, owners typically hold property as joint tenants or tenants in common under the Property Law Act 2007. Joint tenants share ownership equally, while tenants in common can hold unequal shares.
Although not legally required, a formal co-ownership agreement is strongly recommended. It should outline ownership shares, financial contributions, decision-making rules, exit processes, and what happens if someone fails to meet their obligations.
Who pays what, and what if someone pulls out?
All co-owners named on a mortgage are usually jointly liable for repayments. If one party cannot meet their obligations, the remaining owners may be required to cover the shortfall.
Agreements should clearly address:
How deposits and ongoing costs are shared
How profit or equity is divided
How a co-owner can exit without disrupting the rest of the group
For pooled investments managed on behalf of investors, the Financial Markets Conduct Act 2013 may apply, triggering additional compliance requirements.
Ready to start? Your next steps
Shared property ownership works best when everyone involved is aligned and the structure is established upfront. Key steps include:
Agreeing on the purpose, budget, and property type
Selecting the right ownership structure
Getting legal and financial advice before committing
Documenting contributions, decisions, and exit rules
Confirming borrowing capacity with a lender as a group
If you want guidance on how shared property ownership could apply to your situation, the team at Staircase can help you understand your options before you decide. Book a free consultation with Staircase today.
Legal Disclaimer: This article is general information only and does not replace personalised legal or financial advice.
FAQs about investing with others
Can we use KiwiSaver when buying as a group?
Yes. Each person can withdraw KiwiSaver funds if they individually meet the first home criteria, even in a shared purchase.
Does shared ownership affect Bright-line tax rules?
Yes. The Bright-line test applies to the property itself, so all co-owners follow the same timeline for potential tax obligations.
Can someone join or leave the group after the purchase?
Yes, but the bank must approve the change, and the title and agreements need to be updated to reflect the new ownership.
Do we need to use the same deposit amount?
No. Unequal contributions are allowed, but ownership percentages must be recorded clearly to avoid future disputes.
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