PROPERTY

Ask Paul: Should I buy a house with my adult children?

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Thinking of pooling funds with your kids to buy a home? Here's what you need to know to protect your pension - and your financial security.

Reader question

Hi Paul, I'm 74, own my home outright but due to my health am thinking of selling and buying a property that can accommodate myself and my two adult children (they are 55 and 50).

Ask Paul: Should I buy a house with my adult children? Will I lose my pension?

They don't yet own a home but could afford a mortgage so we thought we could all put in and get something that suits us all.

However I want to retain my pension. Who do I speak with to see if this is possible? - Sue

Paul's response

My mind is flashing 'danger, danger', Sue. I can see how this could work really well. I can also see how it could be a complete disaster.

Obviously, I don't know you or your adult kids, but as you live together you obviously get on well. As you age, living with your family would have real benefits. But here, I need to point out the problems that could crop up.

First, your own home, as you know, is an exempt asset for the age pension. It is also a fabulous, secure asset for you. If you sell and use some of the money to buy a home with your children, you can have quite high assets and keep a full pension.

This is up to $321,500 for a single, homeowner aged pensioner. Services Australia can give you specific advice about the impact on your pension under both the assets and income test.

Frankly, though, while important, this is one of my lesser concerns.

What really worries me is that if you buy a home, as tenants in common with your kids, each owning a percentage related to how much you each add in cash (in your case) or a mortgage for the kids, if for any reason they can't pay the mortgage repayments, exactly what happens?

I know this is an extreme comment, but are you out on the street with a forced bank sale of the home?

In my opinion, the first person you speak to is a solicitor to work out how you can own a home with your children, without you risking your financial security. A written agreement drawn up by your solicitor will be essential. Then it is talking to a lender with your kids and see what loan capacity they have.

Sue, you sound like a lovely person who has done much for your kids and wants to do more. That is super generous and it may work beautifully. But you must speak to a solicitor first and protect your lifetime of work and your future security that is currently tied up in your home.

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Paul Clitheroe AM is the founder of Money and serves as the publication's editorial adviser. One of Australia's most trusted personal finance experts, Paul has spent decades helping Australians build wealth, manage debt and make smarter money decisions. He is widely known for host­ing the Money TV program and authoring best-selling personal finance books. Since launching Money in 1999, he has played a leading role in delivering practical, independent financial guidance to Australians. Paul is chair of InvestSMART Financial Services. He was the founding chair of Ecstra Foundation, a national not-for-profit focused on improving financial wellbeing, from 2018 to 2026, and led the Australian Government's Financial Literacy Board and Financial Literacy Australia from 2004 to 2019. In academia, Paul is chair in financial literacy at Macquarie University, where he is also a Professor in the School of Business and Economics. Ask Paul your money question. Due to volume, Paul cannot respond to questions posted in the comments section.
Comments
Col Morris
December 11, 2025 9.11am

This is something I have thought about too as my adult children are still renting at 45 and 41 and I just can't see them being able to buy a house before I die. Considering the high rental costs they have to pay, I thought I could help them both in some way but not sure how as I couldn't afford to buy either of them a house outright.

Wan Ng
December 11, 2025 9.58am

I wished I'd known the implications of joint names on a mortgage account. I helped out making the down-payment for a home our son and his ex bought. Verbally agreed (later denied) that they repay when finances were manageable. He is our only child. We owned outright 2 other properties. So helping them achieve home ownership seemed right at that time. It was suggested that my name was also in the ownership of this property to secure the loan. Years later, I discovered that they had only paid interest-only on the mortgage. I needed to downsized when I retired. My credit was affected by this loan. They divorced; she made sure she got every penny in settlement. It is difficult to predict what could happen even when things are going well, with every good intention.

Erica Erakare
December 11, 2025 1.15pm

I am renting back my house that I sold to my son-in-law for $379,000 because I needed the cash. We agreed that when the house is sold, the balance of the sale price is given to me, after paying off the mortgage (still $379.000). I will use the money to go into a retirement village. The house is valued now at about $1,200,00. My son-in -law's never used the property for tax purposes. I have paid all loan payments as rent as well as all maintenance, insurances etc. Does this sound too complicated? Who should we ask?