What is the difference between Joint Tenants and Tenants in Common?

When purchasing property with one or more people, you should consider the differences. You should decide on the tenancy before exchanging contracts.

Joint Tenancy

If the owners of the property are joint tenants, then the property is owned jointly meaning each party has equal ownership and interest in the property.

The most common option for joint tenancy is married couples or couples in long-term relationships.

If a joint tenant dies, the property will automatically pass to the surviving joint tenant, regardless of the terms in the deceased’s will.

The joint tenancy will come to an end when the property is sold or when a joint tenant transfers their share to the other or when a joint tenant severs the joint tenancy (in the case of a relationship breakdown and protecting your interest in the property).

Tenants in Common

If the owners of the property are tenants in commons, then the property is owned in defined shares that can be disposed of as they wish. The defined shares can be equal or unequal and it is the owners’ decision to define the shares.

The most common option for tenants in common is people who contribute different amounts towards the purchase of a property or investors buying property.

If any of the owners die, their share of the property will be dealt with under the terms of the deceased’s will. It is important to ensure you have a will and it is clear as to who inherits your share of the property.

Tax and Financial Implications

There are tax differences between joint tenants and tenants in common. You should speak with your accountant or financial advisor about the tax and financial implications of each type of ownership before you decide.

Before you make the move, contact our property team to discuss.

Article produced by Gayna Borg