Buying a House With Friends in NZ: What You Actually Need to Know

Two or more friends can legally buy a house together in New Zealand, pooling their deposits, income, and KiwiSaver Scheme withdrawals to reach a property none of them could afford alone. The arrangement requires each co-buyer to have independent legal advice, a written co-ownership agreement, and an exit plan, all in place before settlement day.

For first home buyers priced out of solo ownership, particularly in Auckland and Wellington, co-buying is one of the more practical paths into the housing market right now. Two incomes, two KiwiSaver Scheme balances, and shared repayments can cut years off the timeline to a first home.

The most common trigger for co-owner disputes we see in advisory work is timeline misalignment: one person wants to sell within three years while the other planned to hold for a decade. When that gap is identified early and written into the co-ownership agreement, it is manageable. When it is not identified, it tends to surface under financial pressure, and at that point options narrow and legal costs escalate quickly.

The financial case for buying with friends

As of early 2026, median house prices sit at approximately $780,000 in Wellington and approximately $950,000 in Auckland, according to REINZ monthly data. A 20 percent deposit on a $750,000 property is $150,000. Accumulating that alone, on a single income, while paying rent, can take a decade or more. Split between two people, the deposit timeline can halve.

Beyond the deposit, co-buying improves borrowing power. Two incomes assessed together typically unlock a higher mortgage approval than either buyer could access individually. Ongoing costs like rates, insurance, and maintenance are shared, freeing up cash for savings or paying the mortgage down faster.

For anyone carrying the financial weight of going solo, the arithmetic alone makes co-buying worth investigating.

The KiwiSaver Scheme advantage

Each eligible first home buyer can make a KiwiSaver Scheme first home withdrawal, provided they have been a member for at least three years and intend to live in the property. A minimum of $1,000 must remain in the account. Member contributions, employer contributions, and investment returns can go toward the deposit, but the government member tax credit cannot be withdrawn.

The Kāinga Ora First Home Loan allows purchase with as little as a 5 percent deposit, with the government underwriting the gap to 20 percent. Income caps apply, and eligibility is assessed per buyer. For co-buyers whose combined deposit falls short of 20 percent, this can bridge the gap. Your mortgage adviser can assess which combination of programmes suits your situation.

A worked example: two friends buying a $750,000 home

Consider Alex (earning $68,000 per year, with $45,000 in a KiwiSaver Scheme and $25,000 in savings) and Sam (earning $62,000, with $38,000 in a KiwiSaver Scheme and $20,000 in savings). Both are 28, based in Wellington, and looking at a three-bedroom house in Lower Hutt or Upper Hutt priced at $750,000.

After KiwiSaver Scheme withdrawals (leaving $1,000 each):

• Combined KiwiSaver Scheme withdrawal: approximately $82,000
• Combined savings: $45,000
• Total deposit: approximately $127,000 (around 16.9 percent of the purchase price)
• Mortgage required: approximately $623,000
• Estimated repayments at approximately 6.0 percent over 30 years (based on major-bank 1-year fixed rates published on interest.co.nz as of early 2026): roughly $3,735 per month, or about $1,868 each
• Shared costs (rates, insurance, maintenance buffer): approximately $325 per month each

If Alex tried to buy the same property alone, the deposit would be around $69,000, just over 9 percent, triggering a low-equity margin on top of the standard rate. Monthly mortgage repayments would exceed $4,000, all on one income. Co-buying gives them a near-20 percent deposit, a better interest rate, and manageable repayments each.

These are illustrative figures. Interest rates, fees, and individual circumstances will affect the real numbers. Our first home buying guide covers the full purchase process in more detail.

Joint tenancy versus tenants in common

New Zealand law under the Property Law Act 2007 offers two forms of co-ownership.

1. ‍Joint tenancy gives all owners equal, undivided shares. If one owner dies, their share passes automatically to the surviving owner or owners, regardless of what their will says. All owners must agree to any sale or mortgage.‍
2. Tenants in common allows each owner to hold a defined share, which can be unequal (say 60/40 or 40/30/30). On death, each person's share passes according to their will or intestacy rules. Each owner can, in theory, sell or transfer their share independently.

For friends, tenants in common is almost always the better fit. It accommodates unequal contributions, avoids the automatic survivorship issue (you probably want your share going to your family, not your flatmate), and provides flexibility when lives diverge.

How New Zealand banks assess co-buying with friends

Banks classify friend co-purchases as multi-household mortgages, and policies vary between lenders.

The critical concept is joint and several liability. Regardless of ownership percentages, every borrower on the mortgage is liable for the entire debt. If your co-owner stops paying, the bank will pursue you for the full amount, not just your half.

Where banks diverge is in how they assess affordability. Some assess combined income against total debt, which is relatively straightforward. Others require each individual borrower to demonstrate they could service the full mortgage alone, a much harder test that disqualifies many applicants. A few banks may decline friend applications altogether. The RBNZ's debt-to-income restrictions, introduced in 2024, add another layer: each borrower's existing debts count toward the ratio.

This variation is why a mortgage adviser experienced in multi-household applications matters in a co-buying scenario. The difference between the right lender and the wrong one can be the difference between approval and decline.

The co-ownership agreement

The co-ownership agreement (sometimes called a property sharing agreement) governs everything the mortgage does not: who pays what, who decides what, and what happens when circumstances change. Without one, disagreements default to legal proceedings under the Property Law Act, where a court decides the outcome.

Before the agreement is drafted, each person needs to share openly: their income, debts, credit history, and realistic timeline for owning the property. Five years? Ten? Indefinitely? If one person sees this as a stepping stone to buying with a future partner in three years, and the other expects to be there for a decade, that misalignment needs to be resolved in the agreement, not discovered after settlement. Other questions worth resolving early: what happens if one person's partner wants to move in? What if someone gets a job offer in another city? How do you handle it if one person wants renovations the other cannot afford?

A well-drafted agreement should cover:

• Ownership percentages and how they were calculated (reflecting deposit contributions, for example)
• How ongoing costs are split: mortgage repayments, council rates, insurance premiums, maintenance, and capital improvements
• Decision-making rules for renovations, additional occupants moving in, and house rules
• What happens if one owner wants to sell (right of first refusal for the other, valuation process, timeline)
• What happens if one owner cannot pay (grace period, how the shortfall is covered, when it triggers a sale)
• What happens on death or serious incapacity
• A dispute resolution process (mediation before litigation)
• How equity gains or losses are divided on sale

One risk most co-buyers overlook: if either owner enters a de facto relationship while co-owning, their partner may develop a claim on that owner's share of the property under the Property (Relationships) Act 1976, typically after three years. The agreement should address this scenario, and each co-buyer's lawyer should explain the implications.

Expect to pay $1,500 to $3,000 for a solicitor to draft the agreement. On top of that, each co-buyer should get independent legal advice (a different lawyer reviewing the agreement on their behalf) at roughly $500 to $1,000 per person. Updated wills reflecting the new asset are another $300 to $500 each. For two friends, total legal setup costs typically fall between $3,500 and $6,000.

A co-owner who wants to force a sale without an agreement can apply to the High Court under section 339 of the Property Law Act. That process routinely costs tens of thousands of dollars in legal fees and takes months. The agreement is cheaper by an order of magnitude.

Before signing, consider whether the agreement and the relationship could survive the worst-case version of your co-buyer. Not because you expect the worst, but because an arrangement built to withstand pressure is one worth entering.

Insurance that protects your co-owner

Standard home and contents insurance covers the property. What many co-buyers overlook is the personal insurance that protects each owner's ability to pay.

If your co-owner dies, becomes seriously ill, or loses their income, you face the full mortgage alone under joint and several liability. Life insurance covering each person's share of the mortgage ensures the surviving co-owner is not left with an unserviceable debt. Income protection insurance provides a replacement income stream if one owner cannot work due to illness or injury.

These policies belong in the conversation alongside the co-ownership agreement, before settlement. An emergency fund covering three to six months of shared costs also reduces the risk that a temporary income disruption forces a premature sale.

Tax considerations for co-owners

The bright-line test under the Income Tax Act 2007 (as amended from July 2024) applies a two-year period to most residential property. If co-owners sell within two years of purchase, any gain is taxable. The main home exemption applies to each owner who has lived in the property as their primary residence for the majority of the bright-line period. If one co-owner moves out while the other stays, the departing owner's share may lose the exemption while the remaining owner's share keeps it. Tax obligations can differ between co-owners on the same property.

If any portion of the property is rented out, rental income is taxable. Interest deductibility rules and other tax treatments vary depending on the ownership structure and how the property is used. An accountant familiar with IRD's residential property rules should review the arrangement before purchase.

When co-buying with friends is a bad idea

Honest red flags worth heeding:

• Significantly different financial positions. If one person has substantial savings and a clean credit history while the other has consumer debt and irregular income, the arrangement is unbalanced from the start. The stronger buyer is subsidising the risk of the weaker one.
• Different life timelines. One person wants to own for three years, the other for ten. A forced sale at an inconvenient time benefits no one.
• Reluctance to share financial details. If either party hesitates to disclose their full financial picture, that reluctance is the answer.
• Existing tension in the friendship. Property ownership amplifies relationship dynamics. A decades-long financial commitment with someone you are already navigating friction with is rarely wise.
• Pressure or urgency. Buying because the market is moving or because a specific property appeared this week is how people skip the legal and financial groundwork that keeps the arrangement safe.

Step by step: how to buy a home with friends in New Zealand

1. Have the hard financial conversations: income, debts, credit, timelines, expectations.
2. See a mortgage adviser to understand your combined borrowing capacity and which lenders suit your situation.
3. Engage a solicitor to draft the co-ownership agreement.
4. Each co-buyer obtains independent legal advice from a separate lawyer.
5. Update wills to reflect the new asset and your intentions for your share. Estate planning matters for co-owners at any age.
6. Apply for mortgage pre-approval.
7. Begin the property search, with agreed criteria.
8. Set up a joint bank account for shared property expenses (mortgage, rates, insurance, maintenance fund).

Once the mortgage is live, the work is not over. Reviewing the co-ownership agreement annually, maintaining open communication about finances, and avoiding common mortgage mistakes will keep the arrangement on track.

Frequently asked questions

Can each friend withdraw from their KiwiSaver Scheme to buy together?

Yes, provided each person meets the eligibility criteria independently: a KiwiSaver Scheme member for three or more years, purchasing a first home, and intending to live in the property. Each withdrawal is assessed separately, so two eligible friends effectively double their KiwiSaver Scheme contribution to the deposit.

Do we each need our own lawyer?

Yes. One lawyer drafts the co-ownership agreement, but each co-buyer should have a different lawyer independently review it on their behalf. A single lawyer cannot act for both parties where their interests may conflict.

What if we want to sell but one person disagrees?

The co-ownership agreement should cover this, typically through a buyout mechanism, a right of first refusal, or a mediation process with agreed timelines. Without an agreement, the dissenting owner can apply to the High Court for a court-ordered sale under the Property Law Act. That process is slow and expensive for everyone involved.

Can I buy another property later if I already co-own one?

Legally, yes. Practically, it depends on your borrowing capacity. Because of joint and several liability, some banks will assess you as carrying the full mortgage on the co-owned property, reducing how much additional debt you can take on. You will also lose first home buyer status, which means you cannot use a KiwiSaver Scheme first home withdrawal for any future purchase.

What if one friend wants to move their partner in?

The co-ownership agreement should specify how this decision is made (mutual consent, notice period, any adjustment to cost-sharing). Without a written rule, this is one of the most common sources of co-owner conflict.

Before you commit to co-ownership with friends

Co-buying a home with a friend is one of the more practical ways for New Zealanders to reach homeownership, particularly for those without access to the bank of mum and dad. Pooled deposits, stacked KiwiSaver Scheme withdrawals, and shared repayments shift the maths meaningfully.

The arrangement demands more upfront work than buying alone or with a partner: more legal paperwork, more difficult conversations, and a willingness to treat a friendship with the discipline of a business partnership.

Working out how your mortgage, insurance, co-ownership agreement, and wills interact often surfaces issues people do not anticipate. If you are considering a co-buying arrangement and want help modelling how your combined borrowing, KiwiSaver Scheme withdrawals, insurance needs, and legal costs fit together, our advisory team can walk you through it.