Buying out a co-owner in NSW: how it works and what happens if they refuse

16 Oct Buying out a co-owner in NSW: how it works and what happens if they refuse

To buy out a co-owner, you agree a price for their share, usually based on a current valuation less their share of the mortgage and adjusted for what each of you has paid. Their share is then transferred to you, and the loan is refinanced so they are released from it. If the other owner will not agree to a sale or a buy-out, you can apply to the NSW Supreme Court for trustees for sale under section 66G, and the court can allow a co-owner to buy the property from the trustees under section 66I.

Buying out by agreement

A buy-out agreed between co-owners usually involves these steps:

1. Get a valuation. An independent valuation avoids an argument about price and gives the lender a figure to work with.
2. Work out the share. Start with the equity, which is the value less the mortgage, and take the departing owner’s share. As tenants in common, use the fractions on the title. As joint tenants, the starting point is equal shares.
3. Make the adjustments. Credit each owner for money they paid that the other should have shared, and consider whether any occupation fee or unshared rent should be brought into account. See below.
4. Arrange finance. The buying owner usually needs to refinance so the departing owner is released from the mortgage. Until the lender releases them, a co-borrower generally stays liable for the loan.
5. Transfer and duty. The departing owner transfers their share to the buyer. Transfer duty may be payable on the share acquired. Revenue NSW lists exemptions that may apply to some transfers between spouses or de facto partners and on a relationship break-up.
6. Document it. A lawyer or conveyancer prepares the transfer and a written agreement recording the price and the adjustments.

A worked illustration

These figures are invented to show the arithmetic. They are not a formula the court applies, and every case turns on its own facts.

What can be credited

In Parkas v Shankar [2025] NSWSC 1140, the court held that the allowance for improvements is limited to money a co-owner actually spent. It does not extend to the value of their own time and labour. Credit does extend to mortgage instalments one co-owner paid on a debt both were liable for (Ryan v Dries [2002] NSWCA 3). Where one owner has lived in the property after the other moved out, an occupation fee may come into the account. See occupation fees and credits.

Keep bank statements, receipts and loan statements. A claim for a credit is only as good as the records behind it.

If the other owner will not agree

Any co-owner can apply to the NSW Supreme Court under section 66G for trustees to be appointed to sell the property. The Court of Appeal has said an order is made almost as of right unless it would be inequitable (Foundas v Arambatzis [2020] NSWCA 47 at [63]). Hardship is not a reason to refuse (Vo v Nguyen [2026] NSWSC 692). The full process is in our guide to forcing a sale of jointly owned property in NSW.

A court-ordered sale does not end the chance of a buy-out. Section 66I lets the court allow a co-owner to buy the property from the trustees, at auction or otherwise, on terms it considers reasonable. Those terms can include not paying a deposit and setting off the price against the buying co-owner’s own share of the proceeds.

Vo v Nguyen shows how this can work. The co-owner living in the property with two children wanted more time to buy the other out. The court appointed trustees for sale, but paused the orders for a few weeks so the parties could keep negotiating, and made orders under section 66I allowing either co-owner to buy the property from the trustees.

The cost of refusing

Costs of a section 66G application normally come out of the sale proceeds. But in Rance v Dempsey (No 6) [2026] NSWSC 673, a co-owner who opposed the sale unreasonably was ordered to pay the applicant’s costs out of her own share. Refusing a fair buy-out and then resisting a sale without a recognised ground can be expensive.

If the co-owner is bankrupt

The bankrupt’s share belongs to their trustee in bankruptcy, so any buy-out is negotiated with the trustee, who must get the best result for creditors. See bankruptcy and jointly owned property.

Related guides

• Jointly owned property disputes: forcing a sale in NSW
• Trustee for sale appointments
• Occupation fees and credits when one co-owner lives in the property
• Joint tenants vs tenants in common in NSW
• Bankruptcy and jointly owned property

Common questions

How do you calculate a buy-out of a co-owner?

Start with an agreed or independent valuation, subtract the mortgage to find the equity, and take the departing owner’s share. Then adjust for money either owner paid that the other should have shared, such as mortgage repayments on a joint loan, and any occupation fee or unshared rent.

Do I have to refinance to buy out a co-owner?

Usually. The departing owner will normally want to be released from the mortgage, and the lender will generally need the buying owner to refinance or take over the loan before it releases them.

Is stamp duty payable when buying out a co-owner in NSW?

Transfer duty may be payable on the share acquired. Revenue NSW lists exemptions that may apply to some transfers between spouses or de facto partners and on a relationship break-up, so check before you sign.

What if my co-owner refuses to sell or be bought out?

You can apply to the NSW Supreme Court under section 66G for trustees to be appointed to sell the property. The order is made almost as of right unless it would be inequitable, and hardship alone is not a reason to refuse.

Can I still buy the property after the court orders a sale?

Possibly. Under section 66I the court can allow a co-owner to buy from the trustees on reasonable terms, including setting off the price against their own share of the proceeds.

Sources: Conveyancing Act 1919 (NSW), sections 66F–66I; Vo v Nguyen [2026] NSWSC 692; Parkas v Shankar [2025] NSWSC 1140; Rance v Dempsey (No 6) [2026] NSWSC 673; Revenue NSW, Family transfers. This article is general information, not legal advice about your circumstances. Last reviewed: 16 October 2026.