People commonly purchase property together. This is a big step and most likely one of the largest financial commitments you will ever make. If you have bought a house you have taken the first step in estate planning without even knowing it.

If two or more people acquire a property together, it can be as tenants in common or as joint tenants. At first glance these terms sound similar. However, they have different legal and financial effects on the rights of the registered proprietors if one party exits the property ownership if they die or sell their share.

What is tenants in common?

Under tenancy in common each proprietor can own equal or unequal shares in a property. For instance Bob owns 50% and Jane owns 50% in their family home as tenants in common.

In another example Harry owns 25%, Diana owns 25% and Bill owns 50% in an investment property.

There are many variations to tenants in common which can be tailored to suit your needs.

A tenant in common can sell their share in the property or give it away in their will. There is no right of survivorship for tenants in common.

Tenants in common may be suitable for:

What is joint tenancy?

Two or more joint tenants hold an undivided equal share of the property.

Joint tenants means that the registered proprietors own the property jointly.

If a joint tenant dies their interest in the property passes to the surviving joint tenant or tenants. This happens regardless of any contrary intentions in the will of the deceased.

This is known as the right of survivorship.

Joint tenancy commonly occurs in a husband and wife situation, but it is possible but not common for corporations to hold land as joint tenants, or for a person and a corporation to hold land as joint tenants.

How do you end joint tenancy?

Common scenarios:

Married couple

Rob and Mary own their family home as joint tenants. Mary dies and Tom transfers the property in his name by producing Mary’s death certificate.

Couple in new relationship

John and Jane purchase a new home together and as their relationship is new, they purchase as tenants in common in equal shares (50/50). Soon after John dies in a car accident. The property is not automatically transferred to Jane, instead it is transferred under the terms of John’s will.

Blended family

Bob and Pat have been married for 10 years. Both have children from previous relationships. They have purchased the property as tenants in common in equal shares. Under their wills Bob and Pat give each other the right to live in the property for as long as they wish. When they both die their children will receive their parent’s share of the property.

Advantages of owing a property as joint tenants

Disadvantages of owing property as joint tenants

Advantages of owing your home as tenants in common

Disadvantages of owing your home as tenants in common

There are essential differences between joint tenants and tenants in common.

Which option is the right one for you? Take the time to discover what the right tenancy is for your property. Think about what you want to achieve with your share in the property if you die. You must always consult your accountant or financial advisor about tax and other financial implications of each type of ownership.

To discuss buying a property with another person and the implications on your estate planning, we encourage you to contact The Money Edge on (07) 4151 8898 or email us at 

Disclaimer: This content provides general information only, current at the time of production. Any advice in it has been prepared without taking into account your personal circumstances. You should seek professional advice before acting on any material.

The Money Edge Pty Ltd, t/a The Money Edge is a Corporate Authorised Representative of Akambo Pty Ltd t/a Accountants Private Advice (AFSL no. 322056) ABN 16 123 078 900 Level 14, 379 Collins Street, Melbourne, Victoria 3000.

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