Buying property with friends or family can make owning a holiday home overseas not just cheaper, but achievable at all. It lowers individual financial risk and helps buyers access better properties. However, it also brings legal, financial, and currency risks. These risks can harm both investments and personal relationships if not planned well.
For the right buyers, joint ownership can be a smart strategy. But success depends on structure, clarity and protecting budgets from risks that many buyers only discover too late.
Three financial benefits of buying jointly
For many people, buying a property overseas alone simply isn’t realistic. Even with the long-term savings in holidays, and the benefits of bricks and mortar investments, finding hundreds of thousands of euros or dollars can be a tall order.
There are other funding options like mortgages or equity release, but borrowing money also comes with disadvantages, including paying interest.
You can also share a property in different ways, such as time shares and fractional ownership. But these also come with disadvantages – not least often high management fees and a complete lack of individual control over what should be your property.
Moreover, buying a property with family and friends can have other advantages.
Shared affordability and better buying power
Pooling resources can dramatically change what is achievable. It can help you get a better home in a better location – the kind of property you could only dream of on your own.
Sharing ownership also spreads ongoing costs. Maintenance, local taxes, utilities, and management fees are easier to handle when shared among several owners. This way, no one person has to pay everything alone. Even buyers who can afford to buy outright often choose to spread their money across different investments, prefering not to put all their funds into one asset. Indeed, why not have one holiday home shared with family in one location and another entirely of your own elsewhere?
Better use of a property
Joint ownership can also make better use of the property itself. Holiday homes all too often stand empty for much of the year, of no use to the property or the local area. When many people share ownership, they usually use it more. And with the discipline that comes from sharing ownership with family or friends – such as keeping everything neat and clean – commercial rental is that much eaier too.
A gift for the generations
For families, a shared overseas property can be a long-term asset instead of just a short-term buy. When you structure it properly, you can enjoy it across generations while still making it part of a wider financial plan.
A shared home can help spread family wealth – while you’re still there to enjoy it!
With younger generations finding it increasingly hard to own property while their parents sit on property wealth, freeing up some of that wealth with a family holiday home is a great way that parents can cascade wealth through the generations without necessarily incurring inheritance tax. Moreover, a shared family home means you can pass wealth down while you’re there to enjoy it.
In many countries such as Italy and France it is quite common to own a family property and there are specific property laws and concepts, such as ‘usufruct’, to protect all parties. Contact Your Overseas Home’s property consultant to be put in touch with a specialist property lawyer.
A shared burden
Buying with like-minded friends can also be easier to achieve, less stressful and more fun. Buying a holiday home overseas should be a pleasure, but sometimes it can feel like a burden. You still need to find the right place, go through the whole overseas buying process, then take care of it and pay the bills. Maybe that’s not something your spouse wants to get involved in (or that you believe is their strong point!) and would be happier doing wity friends or siblings.
Where joint purchases can go wrong
The risks of buying jointly are rarely obvious at the outset. Most problems arise not from bad intentions, but from assumptions that people never discuss or write down. What seemed like a great idea at a Christmas party might come up against hard reality in less convivial surroundings.
Differences in expectations are a common issue. One buyer may see the property as a long-term family home, while another may view it as a rental investment. A third buyer might see it as a future asset to sell. Without agreement upfront, these differences can surface at exactly the wrong moment.
But co-owning a holiday home can also create tensions
Legal ownership is another frequent stumbling block. Property laws vary widely between countries, and protections that exist for married couples or civil partners often do not apply to siblings, friends or unmarried partners. The wrong ownership structure can create serious complications around inheritance, control and forced sales.
Life changes also play a role. One owner may need to sell due to divorce, illness, relocation or financial pressure. Without a clear exit strategy, this can lead to disputes, unwanted sales or significant financial strain for the remaining owners.
Managing currency risks
Currency risk is one of the most underestimated dangers of joint overseas purchases. Buyers often focus on the property price and forget that exchange rates can move significantly between agreeing a price and completing the purchase.
When several people are contributing funds, even small currency movements can alter who pays what and by how much – creating both financial and emotional tension.
Currency management is especially important if you are buying an off-plan property. The payments will be spread over many months or even years, and the end cost in your pwn currency will be moving all the time, unless it is locked in with a forward contract.
How to make joint ownership work for you
The most successful joint purchases are those treated as serious financial projects from the outset, not informal arrangements based on goodwill alone.
Before viewing property, all parties should agree on fundamentals: budget limits, intended use, time horizon and whether the priority is lifestyle, investment or a balance of both. Writing this down may feel overly formal, but it avoids misunderstandings that can become expensive later.
Planning it all is the fun part
How to organise ownership
You should choose an ownership structure carefully and with proper legal advice in the country where the property is located. Equal ownership is not always appropriate, particularly where contributions differ. What matters most is that everyone understands their rights, obligations and exposure.
A co-ownership agreement is essential. This should cover how costs are shared, how decisions are made, what happens if someone wants to sell and how disputes are resolved. It acts as a safeguard for both the investment and the relationships involved.
How to organise payment
Funding also needs careful coordination. Joint purchases often involve different funding sources, timelines and levels of commitment. Agreeing in advance who pays what, when funds are due and how shortfalls are handled can prevent last-minute pressure.
Managing currency risk should form part of this planning from day one. When a property is priced in a foreign currency, exchange rate movements can add tens of thousands to the sterling cost without any change in the asking price. This risk exists from the moment a deposit commits buyers to the purchase.
Using tools such as forward contracts allows buyers to lock in an exchange rate for a future date, providing certainty over costs and ensuring that all parties know exactly what their contribution will be. This is particularly important in joint purchases, where fairness and predictability matter.
Ongoing costs should be budgeted realistically. Utilities, taxes, maintenance and management expenses do not disappear just because a property is shared. Many joint owners find it helpful to create a shared account or property fund to cover routine costs and avoid disputes.
Prepare for problems
It might not make you the most popular person in the room to remind your friends or family to prepare for the worst. But you should agree an exit strategy before the purchase completes. Clarity here prevents conflict later.
Agreements should address valuation methods, timeframes and first refusal rights if one owner wishes to exit.
When joint ownership works best
Buying overseas with friends or family works best when objectives are aligned, legal and financial structures are clear, and currency risk is actively managed. It works least well when buyers rely on trust alone and leave key decisions until problems arise.
Joint ownership can be financially sensible, emotionally rewarding and strategically smart – but only when approached with the same discipline as any other major investment.
For anyone considering a joint overseas purchase, early financial and currency planning can be the difference between a smooth transaction and an avoidable financial shock.
Shared holiday home overseas FAQs
What is the 45% rule for shared ownership?
The “45% rule” is an informal guideline often used by lenders and advisors when assessing shared ownership or joint purchases. It suggests that no individual buyer should normally commit more than around 45% of their income to housing-related costs, including mortgage payments, property expenses and associated debts.
In joint purchases, problems can arise if one party is stretching their finances too far while others are not. If one buyer later struggles to meet costs, it can place strain on the entire arrangement. Ensuring all parties are financially comfortable with their share reduces the risk of future disputes or forced sales.
What is usufruct?
Usufruct is a legal concept used in several European countries, particularly France, Spain and Italy. It refers to the right to use a property and benefit from it – including living in it or earning rental income – without owning it outright. Usufruct is often used in family property planning, particularly where parents wish to retain use of a property during their lifetime while passing ownership to children for inheritance or tax planning reasons. Because rules vary by country, specialist legal advice is essential before using this structure.
Do I need to tell HMRC if I buy property abroad?
Buying property abroad does not automatically need to be reported to HMRC. However, you may need to declare certain related matters. If the property generates rental income, this must usually be declared to HMRC, even if tax is also paid overseas. Similarly, capital gains from selling overseas property may be taxable in the UK, depending on your residency status and any applicable double taxation agreements.
How long can I stay in a holiday home in the EU?
For UK citizens, stays in the Schengen Area (which covers most EU countries) are generally limited to 90 days in any rolling 180-day period without a visa. This applies regardless of whether you own the property. Some countries offer long-stay visas or residency options, but rules can vary by country and nationality, so it’s important to check the specific regulations that apply to your situation before planning extended stays.
