Purchasing property together? Learn the important difference between ‘joint tenants’ and ‘tenants in common’

Written by Ching Cao, April 2018
If you are purchasing a property with another person, your lawyer or conveyancer should always ask you whether you and the other joint purchaser would like to own the property as ‘joint tenants’ or ‘tenants in common’. The difference between the two options are quite crucial. 
To put it simply, joint tenants own the property as if they are one entity. You cannot choose the proportion of the property you own (although this is assumed to be 50% each in certain circumstances). Once a joint tenant passes away, the other joint tenant is automatically entitled to the entirety of the property. 
On the other hand, tenants in common own the property in equal or unequal proportions, for example, A owns 30% and B owns 70%. If A or B passes away, the share that they own will be distributed according to their will (or the relevant succession laws if there is no will). Additionally, choosing the most suitable option could significantly reduce the amount of tax you have to pay in the future (such as capital gains tax). I recommend you speak to an accountant for more details. 
If you have any questions about what is discussed above, please give me a call on 08 8278 4291.
This article is meant to be short, informative and easy to understand for non-land industry professionals and as such contains simplified terms and generalised concepts. If you want to clarify or discuss anything further, please do not hesitate to contact me.
Keywords: joint tenants, tenants in common, co-ownership, joint purchase, multiple purchasers, purchaser

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Purchasing property together?

Learn the important difference between ‘joint tenants’ and ‘tenants in common’