Thinking about co-buying a home in Ottawa? Learn the pros and cons of joint ownership, legal tips, and how to buy property with friends or family in 2025.
Why More Buyers Are Choosing Co-Ownership in 2025
With rising home prices and tighter mortgage rules, buying a home with friends or family in Ottawa has become a smart and creative way to enter the housing market.
Reasons Co-Ownership is Trending:
Affordability: Split down payments and mortgage payments make it easier to qualify.
Increased buying power: Co-buyers can afford larger or better-located homes.
Multigenerational living: Families are pooling resources to live together while maintaining independence.
Friendship-based co-buying: Close friends are investing together and splitting the space—or renting out half.
In a city like Ottawa, where the average home price in 2025 hovers around $710,000, teaming up can make ownership possible.
What Is Co-Buying and How Does It Work?
Co-buying means purchasing property jointly, with two or more people sharing ownership, responsibilities, and liabilities.
Two Common Ownership Types in Ontario:
Joint Tenancy:
Equal ownership
Right of survivorship (if one dies, their share goes to the other)
Often used by spouses or close family members
Tenants in Common:
Unequal ownership possible (e.g., 70/30)
No right of survivorship
Ideal for friends or business partners
All names appear on the title and mortgage, and all co-buyers share legal responsibility.
Pros of Buying a Home with Friends or Family
Here’s why co-ownership can be a winning strategy:
For many, it’s the only viable way to buy in today's competitive market.
Cons and Risks of Co-Buying Real Estate
It’s not all smooth sailing—sharing a home is a serious commitment.
That’s why legal agreements and honest communication are key.
Creating a Co-Ownership Agreement: What to Include
Before you buy, draft a formal co-ownership agreement—even if you’re family or lifelong friends.
What It Should Cover:
Ownership shares (equal or proportional)
Down payment contributions
Monthly expense split
Renovation or maintenance responsibilities
Exit strategy (buyout clauses, forced sale, timeline)
Decision-making process (tie-breaking rules)
Rental income rules, if applicable
Have a real estate lawyer help you create this document—it's your safety net.
Mortgage and Financing Options for Co-Buyers in Ottawa
Getting a mortgage as co-buyers means combining your incomes—and credit histories.
What Lenders Look For:
Combined debt-to-income ratio
Credit scores of all applicants
Total down payment (must be verified for all buyers)
Agreement on ownership structure
Mortgage Options:
Joint mortgage with one loan
Co-signing, if a parent is helping
Separate legal agreements to define repayment and ownership, even with one mortgage
You'll also need to insure the home and possibly buy life insurance to protect the investment.
Choosing the Right Property for Co-Ownership
Not all homes are suited to shared ownership. Here’s what works best:
Duplexes or side-by-sides: Built-in separation, privacy
Homes with in-law or basement suites: Separate entrances and kitchens
Large bungalows or two-storeys: Can divide by floor
Renovation-ready homes: Customize for multiple units
Choose a property that fits everyone’s space, budget, and lifestyle needs.
What Happens If One Person Wants to Sell?
Life changes. If one owner wants out:
Your Agreement Should Define:
Right of first refusal (others get a chance to buy their share)
Valuation method (e.g., third-party appraiser)
Sale terms: Can the whole home be sold? What’s the notice period?
Legal exit clauses to avoid conflict or legal action
Having a plan avoids stress—and protects your investment.
Tax Implications and Legal Advice for Co-Owners
Taxes vary based on property use and ownership type.
Key Tax Notes:
Primary residence exemption: Only one home per person can be declared
Capital gains: If a co-owner rents out their portion, they may owe tax on sale
Rental income: Must be declared proportionally by each owner
Land Transfer Tax: Paid based on full property value at closing (split equally unless stated)
Always consult a real estate lawyer and accountant before co-buying.
FAQs About Buying a Home with Friends or Family
1. Can we split ownership unevenly?
Yes—via tenants in common, you can divide ownership (e.g., 60/40) based on contributions.
2. Do we need a lawyer to co-buy?
Absolutely. A lawyer can draft your co-ownership agreement and explain tax/legal impacts.
3. Can one person move out and still keep ownership?
Yes—but they'll still be legally and financially tied to the property unless bought out.
4. Is it hard to get a mortgage as co-buyers?
Not if you all have decent credit and stable income. Joint approval is required.
5. What happens if one person defaults on their share of the mortgage?
Everyone is responsible. That’s why clear agreements and backups are essential.
6. Can co-buyers also rent out part of the home?
Yes—just make sure local zoning allows it, and split income/taxes fairly.
Final Thoughts: Making Joint Ownership Work in Ottawa’s 2025 Market
Buying a home with friends or family in Ottawa is a smart solution to high housing costs, but it’s not something to jump into lightly. With the right planning, legal safeguards, and open dialogue, it can be a powerful way to build equity and create a shared future.
Team up wisely, write it down, and enjoy the journey to homeownership—together. 🏡🤝
