With GTA home prices making solo homeownership increasingly difficult for many buyers, purchasing a property with a friend has become a real option worth considering. Friends can legally buy a house together in Ontario — but the personal dimension of the arrangement introduces risks that don't exist when buying with a spouse or family member. Getting this right requires a clear legal structure, a detailed co-ownership agreement, and honest conversations before you sign anything.

Yes. Ontario real estate law places no restrictions on who can co-own a property. Two friends — or more — can buy a house together, appear on title, and share mortgage responsibility. There is no requirement that co-purchasers be related, married, or romantically involved. Lenders apply the same qualification standards regardless of the relationship between co-buyers.

What distinguishes a friend co-purchase from other arrangements is the absence of the legal protections that apply to spouses (under the Ontario Family Law Act) and the informality that often exists between friends. Without formal agreements, disputes about property are resolved the same way any commercial dispute would be — and that can be expensive and damaging to the friendship.

How Friends Typically Structure Co-Ownership

When friends buy a house together, the typical structure is tenancy in common. This allows each friend to hold a specified percentage of ownership — not necessarily 50/50 — which can reflect unequal contributions to the down payment or ongoing costs. Each person can also will or sell their share independently, which matters if one friend eventually wants out.

Joint tenancy — where both owners hold equal, indivisible shares with right of survivorship — is less common between friends because it requires equal ownership and transfers the deceased's share automatically to the surviving co-owner rather than to their estate. Most friends prefer tenancy in common precisely because it preserves independent ownership rights.

The ownership split should reflect each person's actual financial contribution and what both parties agree is fair. If one friend contributes 60% of the down payment, holding 60% of the ownership in tenancy in common is a defensible structure. Document this in writing before closing.

The Co-Ownership Agreement: Non-Negotiable for Friends

For friends buying a house together, a co-ownership agreement isn't optional — it's the document that makes the arrangement survivable if circumstances change. A real estate lawyer in Ontario can draft one for $500–$2,000. The agreement should cover:

  • Ownership percentages: What percentage each friend owns and how it was determined
  • Contribution to costs: How mortgage payments, property taxes, insurance, maintenance, and repairs are split
  • Decision-making: Who makes decisions about major repairs, renovations, or renting out part of the property
  • Exit process: How one friend buys out the other, with a defined process for agreeing on price (e.g., independent appraisal) and timelines
  • Right of first refusal: Whether the co-owner has the right to buy the departing friend's share before it's offered to outside buyers
  • What triggers a forced sale: Job loss, inability to pay, death, major life changes, or simply wanting to exit
  • Dispute resolution: Whether you'll attempt mediation before litigation

The uncomfortable conversations you have while drafting this agreement are far less painful than the ones you'll have if something goes wrong without one. Friends who buy a house together without a co-ownership agreement and later disagree about selling may face a costly partition application in Ontario court.

Mortgage Qualification When Friends Buy Together

When friends apply for a mortgage together, both incomes are included in the qualification calculation — which can significantly increase borrowing power in a high-price market like the GTA. Both credit scores are reviewed; lenders typically qualify based on the lower of the two scores.

Both friends will be equally responsible for the mortgage regardless of ownership percentages. If one stops paying, the lender can pursue either party for the full balance. The mortgage is a joint and several liability — not split 50/50. The co-ownership agreement can address what happens internally, but it doesn't change what the lender can do.

Having both friends on the mortgage also affects each person's debt ratios for any future borrowing. The full mortgage payment appears as a liability on each friend's credit profile, which can limit their ability to get other credit or buy a second property in the future.

Tax Implications When Friends Buy a House Together in Ontario

The principal residence exemption — which allows you to sell your home tax-free in Canada — applies to the home where you actually live. If both friends live in the co-owned house as their primary residence, each can claim the principal residence exemption on their share of any capital gain when they eventually sell. If one friend later moves out while still on title, that person loses the ability to claim the exemption for years they're not residing there, potentially creating a capital gains tax liability on their share.

Rental income, if friends decide to rent out a basement suite or part of the property, must be reported by each owner in proportion to their ownership share. Consult a tax accountant for your specific situation.

What Happens If One Friend Wants to Sell?

This is the most common pressure point for friends who buy a house together. Common scenarios:

  • One friend gets a job in another city and needs to exit
  • One friend gets married and wants to buy a home with their partner
  • One friend can no longer afford their share of costs
  • The friendship itself breaks down

Without a co-ownership agreement, the departing friend can force a sale through a partition application in Ontario court — a process that typically takes months, generates legal fees for both parties, and often produces a sale price below market value. With a good co-ownership agreement, exit procedures are defined in advance: timelines, valuation method, right of first refusal, and what happens if the remaining friend can't qualify to buy out the other.

If you're considering this arrangement and want to understand the broader buying process, read our guide to the steps to buying a home in the GTA. For the legal ownership structure details, see our overview of how two people can buy a home together in Ontario.

FAQ

Can two friends get a joint mortgage in Ontario?

Yes. Lenders in Ontario don't require any personal relationship between co-borrowers. Two friends can apply for a mortgage together, combining their incomes for qualification. Both will be equally liable for the full mortgage balance — a joint and several liability that remains regardless of what any private agreement between them says.

How do friends split mortgage payments when co-owning a home?

The split is whatever the parties agree to — typically proportional to ownership percentage. The co-ownership agreement should specify how mortgage payments are made (e.g., one shared account that both contribute to monthly), who is responsible for ensuring the mortgage is paid on time, and what happens if one person falls short.

Can one friend sell their share of a jointly owned house in Ontario?

Yes. In a tenancy in common, each owner can sell their share to a third party. However, most co-ownership agreements include a right of first refusal — requiring the departing friend to offer their share to the co-owner before selling to an outside buyer. Without such a clause, the remaining friend could find themselves co-owning a home with a stranger.

What if one friend stops paying their share of the mortgage?

The lender doesn't split liability — if one friend stops paying, the lender will pursue both owners. The co-ownership agreement should specify what happens in this scenario: whether the other friend covers the payment and is reimbursed, whether non-payment triggers an exit process, and what remedies are available. Without an agreement, you're left negotiating under pressure.

Do friends who co-own a house both get first-time buyer benefits in Ontario?

Each buyer's eligibility for first-time buyer benefits — like the Ontario Land Transfer Tax refund and the federal First-Time Home Buyers' Tax Credit — is assessed individually. If both friends are first-time buyers, both can claim their respective refunds and credits. If only one is a first-time buyer, only that person's share of the refund applies.

Before you move forward, make sure you're both clear on the financial commitment. Start with our guide to how much house you can afford and check what closing costs you'll face with our overview of what closing costs home buyers pay.