If you are thinking of purchasing property with another person or group of people, such as your partner, sibling, parent or friend, it is important that you decide the most appropriate way in which you and your co-owners will own the property.
The two types of co-ownership for joint property in Victoria are joint tenancy and tenants in common.
People who purchase property as joint tenants own the whole of the property together. If one owner dies then the deceased’s share of the property automatically passes to the surviving owner. The most significant effect of joint ownership is therefore that the property doesn’t from part of your estate on your death, rather it automatically passes to the other owner.
It is common for married and de facto couples to purchase property as joint tenants.
On the other hand, people who own property as tenants in common each have a defined share in the property, whether it be equal or unequal shares.
For example, two owners may each own 50% of a property, or one of the owners may own 60% and the other owner may own 40%.
Friends and business partners often purchase property as tenants in common as they normally want to be able to gift their share in the property to a spouse or family member in their Will, as opposed to their share automatically going to their friend/business partner who they co-own the property with.
There are good reasons to own property as joint tenants and good reasons to own property as tenants in common. The most appropriate form of co-ownership will depend upon your personal circumstances.
Although the manner in which property is owned can be altered at a later stage, the best time to decide the most appropriate type of co-ownership is at the time of purchasing in order to avoid further costs down the track. At OFRM we will discuss the form of ownership with you when you purchase property. If you have property where you think that the ownership is not currently the right method for you, please contact the Conveyancing team to discuss further as this can be altered.