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You can only add family members in the same steam store region.
Unfortunately over here it seems to be doing IP-based location as I'm not able to add my brother who lives in a different part of the same town.
just have him login to your computer, then log him out, then add him as a family member, steam will see both use the same ip/computer, and bam, your good
Yeah this has been a sticking point since the beta, they never responded to the thousands of comments complaining about it. It's pretty bullshit and makes this feature useless in many circumstances.