What is the difference between owning a property as joint tenants or as tenants in common?

With joint tenants: if one owner passes away, the other owner(s) automatically inherits the deceased owner's share in equal parts. This is known as the right of survivorship. Joint tenants can only own in equal shares: 50/50, 33/33/33 or 25/25/25/25 if there are two, three or four owners respectively.

Most couples, in a long-term relationship, will buy a property they will live in as joint tenants, unless there are legal liability and/or tax reasons why a different ownership structure is more optimal.

With tenants in common, the deceased owner’s share goes straight to the deceased’s owner's estate, and is dealt with according to their will. There is no right of survivorship. Tenants in common can also own in different share amounts if they wish, such as 60/40 and 90/10 for two owners, or 25/25/50 and 2/49/49 for three owners. This difference in ownership percentages can reflect the different deposit amounts that the owners contributed to the purchase price, or personal inheritance preferences and estate planning. Different ownership shares can be beneficial for tax and legal liability reasons, and they can also be required by a lender funding the purchase.

Where at least two people are looking to purchase a property together, they should consult their accountant, financial planner and mortgage broker/banker about the different ownership options, and what is the best way to go, to suit their individual circumstances. And loan/mortgage documents must reflect the chosen ownership structure.

Note: the above is general information and should not be considered as legal advice.

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