Purchasing property with a partner can be an exciting time in life, however, it is important not to overlook what kind of method of ownership you should use.
When two or more people purchase property together, they can own the property as joint tenants or tenants in common.
Joint tenancy allows for two or more co-owners to own an asset, each with an equal interest in the property. Each joint tenant has an undivided interest in the property, therefore your share cannot be left to beneficiaries in your Will, rather the surviving party or parties will receive ownership of the property.
Tenants in common operates differently, whereby each owner has a separate and distinct interest in the property. Tenants in common may hold unequal interests in the property, for example, one may hold a 25 per cent interest and the other a 75 per cent interest.
The main difference between joint tenancy and tenants in common is what happens upon a partner’s death. The autonomy of the tenants in common structure allows owners to leave their share of the property to their chosen beneficiary in their Will. This automatic transfer of property does not exist for those who jointly own a property.