Should we share property ownership?

Q.

We are looking at buying a property with a relative with the sole intention that our relative will live in the property and pay the running costs. Any major repairs will be shared equally. He will input $200,000 cash and we will borrow the remaining $245,000 plus legal fees. If, at a later date his financial position allows and he wants to buy into a bigger share in the property, how would we fairly calculate the amount he would need to pay us and what are the implications and costs of doing this at a later date?

There is a well known saying - "if you want to invest in property, your best partner is the bank, because all they ever want is the interest". Both parties are losing a lot of flexibility in the proposed arrangement, and to make matters worse, you will be liable for CGT, and he will be liable for stamp duty, if you wish to transfer all or part of your remaining share to him. If he cannot qualify for a loan on his own, a better option is for you to go guarantor.