Joint tenants and tenants in common

When you’re buying a property, you may come across conveyancing terms that could have legal, tax and estate planning implications.
If you and another person are about to become owners of a property, there are two different structures you need to consider.

What’s The Difference Between Joint Tenants and Tenants in Common?

When multiple individuals or entities are buying a property, it is essential to specify whether they are holding that property as “joint tenants” or “tenants in common”. These two terms have significant differences in conveyancing law, which we have outlined below to help give you a better understanding.

Joint tenants

When you own property as joint tenants, you and the other person both own the property together. This means you both own the entire property, not just part of it.

It’s important to note that joint tenant properties hold a unique characteristic – they don’t become a part of your estate after you pass away. Upon the death of one owner, the property automatically transfers to the surviving owner. This means you cannot include a joint tenant property in your Will or estate planning.

Tenants in common

If you own property as tenants in common, you and the other owner can own a defined share of the property (e.g. 50% each, or 90% and 10%). If you own a property as tenants in common, you don’t automatically get a specific proportion of the property. You need to agree to this with the other owner first.

You can give your share of the property to someone else. Your share is part of your estate, so make sure to include it in your Will and estate planning.

Benefits of legal advice

If you are going through the conveyancing process, it is important to seek legal and financial advice before entering into a contract. The wrong decision can have serious estate planning, transfer duty and tax implications for you and your family.

The Townsville Conveyancing Centre provides home buyers with expert legal advice to help identify the best option. Contact our team of conveyancing solicitors today.