This information has been provided by
Australian law firm, Australian Conveyancing Services and is applicable in New South Wales
only.
If you are purchasing a property with one or more other persons, then you
will need to state whether you are holding the property as joint tenants or as tenants in
common. This will be specified on your Contract and in your transfer document.
If you own a property as joint tenants, it means that:
You all own the property in equal shares
If one of the owners die, then their share automatically passes to the other owners (even if you have a Will that gives your share to someone else – your Will cannot override a joint
tenancy)
This type of ownership is most popular with married and long term defacto
couples, as it is often their wish that if they die, that
their share in the property goes to the other partner.
I recommend that you get legal
advice before you select whether you will hold as joint
tenants or as tenants in common. This is because that
decision is tied up with your Estate matters (that is, how
you would like your property to be distributed if you were
to die). It is quite expensive to change the way you hold a
property after it is done, so now is the time to get it
right.
NOTE: If you are buying a property that will be your major asset, and you have dependents
(ie children from a previous relationship) then you may not wish to choose this option. This is because your only asset needs to be shared amongst your children as well as your partner, should you die. There are other ways to get around this, however. For instance, you could take out life insurance, so that in the event of your death you could leave your share in the property to your partner, and the proceeds of your life policy to your children.
If you own a property as Tenants in Common:
You can choose to own the property in equal shares, or unequally. For instance, if one of you have contributed more to the property than the other, you could hold shares of say, 1/3rd and 2/3rds)
If you buy a property as tenants in common, then make sure that you have in place a Will to deal with your share in the event that you pass away. Otherwise your share will not automatically go to your loved ones. You can do your Will online through
Quicklaw. For more information, click here.
If one of the owners
die, your Will decides who gets your ownership share (it
will not automatically go to the other co-owners as it
would if you held as joint tenants)
This way of owning a property is popular with owners who don’t want their share to necessarily all go to the other owners. For instance, if you buy into a property with a group of friends, or with your business partner, etc.
