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Trying to get on the property ladder but having trouble putting that deposit together or concerned about being able to afford those mortgage payments? Wait, there is a way around this with the help of family or the input of friends.

With house prices having rocketed in recent times, the need for that pesky deposit is getting harder to achieve. Need to look at the bank of Mum and Dad? Can your family assist but don’t want to get caught by the Brightline test but still want some protection?

Typically in this situation, that Mum or Dad who lent you money towards a deposit might just want to have their name on the Certificate of Title to represent their input into buying the property. However, if in a year or two you can pay Mum or Dad back one or the other of you will almost certainly get caught by the Brightline Test. That means there would be tax to pay on the capital gain.

How do you get over this problem? One way is to form a family trust and structure the family trust so that Mum and Dad get protection from that structure using a family trust.

Another way is for Mum and Dad to secure their “loan” to you by way of a formal loan with associated security covering the loan.

Protection for all parties involved!

But you have a couple of friends who are keen to get into property. Between say 3 of you, the efforts of all 3 can find that deposit for the house. And that means those mortgage payments are suddenly affordable.

Dad tells you to be careful going into business with friends but . . .you really want to go ahead. What can you do?

First of all, it is important that as you sign that agreement to buy the property, a carefully drafted Property Sharing Agreement is drafted and put in place.

That Property Sharing Agreement covers a multitude of matters such as what share in the property each person has, how to share responsibility to pay the deposit, pay the mortgage and maintain that new property. It will also cover what happens if one or more parties want to sell his, her or their share in the property.

If you are looking at the bank of Mum or Dad or are wanting to buy a property with a friend or friends, you should look at the options available to you before you go any further. Whatever you are thinking of doing, it is best to get some certainty in your life before committing yourself to save potential heartache down the track.

Interested in taking this further? If so, contact Rob Ellis on either 0274 757728 or on

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