Sharing an overseas property with family or friends is a convenient way to make everything more affordable, from the initial purchase to the running costs. If it’s a route you’re considering in 2025, here are some key points to consider before taking your sibling, parents or best mate on a New Year viewing trip…
Christmastime is a famously busy period for property portals. Why? It’s when we start contemplating the new year.
For many of us that means weighing up the possibility of moving or buying a second home. Fanciful or not, there’s no harm in having a browse on a few portals, is there?
Buying together with family is a great way to double, triple or quadruple your budget, and to have somewhere everyone can enjoy. Find out how joint ownership works in our free guide.
The fun begins when you share your ideas with your nearest and dearest. Before you know it, you’ve hatched grand plans to move abroad together or share a holiday home by the Mediterranean.
It might be worthwhile revisiting the idea once the effects of one too many Baileys have worn off, but if you’re still keen to pursue the co-owning option, here are some thoughts why and how to do it.
When sharing makes the dream feasible
Sometimes joining forces with friends or family is the only way to make the dream of overseas home ownership possible.
A common scenario is a retired couple and their adult child, often with their own partner and family, each selling their respective family homes to purchase one large residence together.
If it’s not attainable on your own, why not sound out your parents or other suitable candidates?
“It’s a deal!” Friends buying property overseas together
Boost buying power
Maybe you can afford to buy on your own, but you’re just not inspired by what’s within your budget.
Teaming up with other like-minded people will boost your buying power. Instead of an apartment or small townhouse, the increased budget could mean you and your co-buyer could afford a detached villa or a better location.
Remember, generally the more desirable a property the better the rental return. It should also hold its value better, which is important in the event the property is ever sold.
Share the load
Splitting those unavoidable ongoing costs – taxes, utilities, insurance, community fees etc – with your fellow owner is one of the great attractions of this type of ownership.
But buying a second home doesn’t just bring extra bills. It carries responsibility and demands a certain amount of your time and organising. Even if you have a local key-holder to check the property regularly, visiting the property in person once in a while brings peace of mind. Having someone else to share all this with can only be a good thing.
Value for money
Sadly, too many owners don’t get to use their second homes even half as much as they’d like to. This could be down to work commitments, family ties, school holidays, limited flights, financial reasons or just not getting round to it.
Even if a property is let to holidaymakers, it’s still likely to sit empty for much of the low season. Paying for half of a property and still using it a decent number of weeks a year could make ownership feel more worthwhile.
Structure it right
Critical to making a success of a property share is ensuring the most suitable ownership structure is in place. What that is will depend on individual circumstances. Inheritance law and tax should be taken into consideration. Always take professional legal advice about this, especially as laws can vary by country.
As a guide, most countries allow for multi-ownership and you can have as many people as you wish on a title deed. This allows the two independent parties to contribute equally towards the purchase and have an equal share of the property.
If two couples are buying, it might make sense to the have four individuals’ names on the title, each with 25%. In some cases, for example, if one party contributes more towards the purchase, one party can be appointed a larger share – but this could lead to complications.
Another option is for the property to be purchased through a company structure, with company shares appointed accordingly.
Buying in children’s names
When the buying party comprises parents and adult children, a sensible option could be to make the children the legal owners. The parents can be given a lifetime interest in the property, known as a “usufruct”. This is “the right to enjoy the use and advantages of another’s property short of the destruction or waste of its substance”. It means the parents have the right to reside there for their lifetime.
When they pass away, their life interest ends, potentially minimising the tax burden for the children who then own the property outright. This is especially useful when the parents might be funding all or most of the purchase. Again, professional advice should be taken, especially regarding the tax implications, before deciding on this route.
Exit strategy
Life happens, and without being negative, have a plan and make provisions for one or both parties wanting to sell their share of the property. Your lawyer advising on your ownership structure should be able to help with this and ensure that both parties agree to the solution, which is included formally in the legal documentation.
Logistics and practicalities
Assuming you’ve worked out that shared ownership will work with your chosen co-owner, consider the practicalities around usage and property management. Success is all about transparency.
Decide how you will allocate usage in the year – the popular weeks will be in demand, so perhaps rotate who gets these. Set up a shared calendar so each party can keep track of availability and usage. Open a shared local bank account so both parties can manage bills and see money coming in and out. Get a shared spreadsheet going, where all outgoings and payments are logged. Have some kind of rules for cleaning, linen and towels, and replacing household items. Be sure you agree on the sort of budget for furnishings etc.
Above all, be prepared to be flexible – sharing is caring and could save you a bundle!
