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What's the difference? Joint tenancy means automatic right of survivorship - when one owner dies, their share passes automatically to the surviving owner. Tenants in common means each owner holds a distinct share that forms part of their estate and passes under their will.
When does each apply? Joint tenancy works for long-term committed relationships with shared estate planning goals. Tenants in common suits business partnerships, unequal contributions, or different estate planning intentions.
Why does it matter? Your ownership structure determines whether your will controls your property share and whether contributions are reflected accurately.
Key takeaway: Professional guidance ensures your ownership structure matches your relationship and estate planning goals from the start - avoiding problems when circumstances change.
Consider your ownership structure before contracts are exchanged - changing it later involves additional processes and potential duty implications. For investment partnerships with unequal contributions, tenants in common allows reflecting actual ownership percentages (like 60/40 or 70/30 splits), protecting each investor's capital. If you're investing with business partners rather than personal partners, tenants in common provides clearer exit options and individual control over your share. Co-ownership agreements complement ownership structure by documenting decision-making, expenses, and exit processes - particularly valuable for investment properties with multiple owners.
You're buying property with a business partner, family member, or spouse. Your solicitor asks whether you want to own the property as "joint tenants" or "tenants in common." You're not entirely sure what the difference is, whether it actually matters, or what happens if you choose the wrong one.
This isn't just legal terminology. Your ownership structure affects what happens when one owner dies, whether your will controls your property share, how unequal contributions are reflected, and whether your estate planning actually works the way you intend. The choice you make now shapes outcomes years down the track - particularly for property investors, business partnerships, and blended families.
I help property buyers understand how ownership structures affect their specific circumstances and choose the option that protects both co-owners while supporting their goals. Here's what the difference actually means and when each structure makes sense.
These are the two ways multiple people can co-own property in NSW. The fundamental difference is what happens when one owner dies.
Joint Tenancy:Joint tenancy creates automatic right of survivorship. When one joint tenant dies, their interest in the property automatically passes to the surviving joint tenant(s). This happens regardless of what the deceased owner's will says - the property doesn't form part of their estate for that purpose.
All joint tenants hold equal shares in the property. You cannot be joint tenants with unequal interests like 60/40 - it's always equal regardless of who contributed what. Joint tenancy requires what's called the "four unities": unity of interest (equal shares), unity of title (same document creates ownership), unity of time (ownership starts simultaneously), and unity of possession (equal rights to occupy).
Tenants in Common:Tenants in common means each owner holds a distinct, separate share in the property. That share forms part of your estate when you die and passes under your will to whoever you nominate. Your co-owner doesn't automatically inherit your share.
Shares can be unequal - 70/30, 60/40, or any proportion that reflects actual contributions or agreements. Each owner has independent ownership of their share. You can leave your share to anyone via your will: your children, other family members, a trust, or even someone completely unrelated to the property's other owners.
The Critical Distinction:When one owner dies, joint tenancy means automatic transfer to the co-owner (your will is irrelevant for the property). Tenants in common means your share passes under your will exactly like other estate assets. This difference drives most other considerations about which structure suits your situation.
Joint tenancy suits situations where automatic survivorship matches your intentions:
Long-term committed relationships where both parties want the survivor to inherit automatically. Married couples in first marriages with no complex family considerations often use joint tenancy because they genuinely want each other to inherit the whole property.
Shared estate planning goals where both owners have similar intentions about who should eventually inherit. When you both want your combined assets to go to the same beneficiaries (like shared children), joint tenancy's automatic transfer achieves this efficiently.
Equal contributions where both owners contribute equally to purchase and ongoing costs, and equal ownership reflects reality. Joint tenancy's mandatory equal shares suit this situation.
Simplicity valued where automatic transfer on death provides certainty without requiring estate administration for the property. The survivor doesn't need to wait for probate to deal with the deceased's property share.
Joint tenancy creates problems in several common situations:
Business partnerships where the relationship is commercial rather than personal. Business partners rarely want their co-investor's spouse or children to inherit the business partner's share automatically. Tenants in common allows each partner to leave their share to family while protecting the investment.
Unequal contributions where one owner contributed significantly more to purchase. Joint tenancy's mandatory equal shares means the larger contributor's extra investment isn't reflected in ownership - creating unfairness if the relationship ends or one owner dies.
Different estate planning intentions where you want your property share to go to specific beneficiaries rather than your co-owner. Joint tenancy overrides your will - you cannot leave your share to anyone else because survivorship takes precedence.
Blended families where you have children from previous relationships. Joint tenancy means your share automatically goes to your current partner rather than your children. This conflicts with many people's estate planning intentions to provide for children from all relationships.
Asset protection concerns where one owner faces potential bankruptcy or creditor claims. Joint tenancy means a creditor attacking one owner's interest can force sale of the whole property. Tenants in common provides better separation between owners' positions.
Having worked in property law, I've seen partnerships where joint tenancy created significant problems when one partner's circumstances changed unexpectedly. What seemed like simple shared ownership became complicated when estate planning, relationship changes, or financial difficulties arose.
Tenants in common suits situations where independent control and distinct ownership matter:
Business partnerships or investment partners where the relationship is commercial. Each partner can leave their share to their own family rather than their business partner automatically inheriting. This protects family interests while maintaining the investment partnership.
Unequal financial contributions where ownership percentages should reflect who contributed what. One owner contributes $400,000 deposit, the other $200,000? Tenants in common allows 66.67%/33.33% ownership reflecting actual contributions. This protects each person's investment level.
Different estate planning goals where owners want their property share to go to different beneficiaries. Parents buying with adult children often want their larger share to go to all their children equally, while the adult child co-owner wants their smaller share to go to their own family.
Blended families or complex family structures where you want to provide for children from previous relationships. Tenants in common ensures your property share passes under your will to whoever you nominate - your children from a previous marriage, current partner, or split between multiple beneficiaries.
Parents buying with adult children where the parent contributes most of the deposit but wants the child to have some ownership. Tenants in common (perhaps 80/20 or 70/30) reflects the parent's larger contribution while giving the child property ownership and its benefits.
Asset protection requirements where one owner has potential creditor risks. Tenants in common provides clearer separation - if one owner faces bankruptcy, their share is at risk but the co-owner's distinct share has better protection.
Tenants in common adds complexity that isn't always necessary:
Long-term married couples with shared goals where both parties want the survivor to inherit automatically and estate planning goals align. Joint tenancy achieves this more simply - survivorship happens automatically without requiring will administration.
When simplicity strongly preferred where avoiding estate administration matters more than individual control over shares. Joint tenancy means the survivor continues ownership without needing to deal with the deceased's estate for property purposes.
Both owners want survivor to inherit automatically where survivorship reflects actual intentions. If you genuinely want your co-owner to inherit your share when you die, joint tenancy achieves this efficiently without requiring your will and estate administration.
The choice isn't about trust or relationship quality - healthy relationships use both structures depending on their specific circumstances, family situations, and estate planning goals.
You're buying property with someone and wondering which ownership structure actually protects both of you. What happens if your relationship changes, one owner dies unexpectedly, or financial contributions differ significantly from what you initially planned?
You're concerned about estate planning implications - will your property share go to who you intend, or does your ownership structure override your will's intentions? If you've contributed more financially, how is that protected if something happens to your co-owner?
You're not sure whether this choice is as important as your solicitor suggests, or if you're overthinking something that rarely matters in practice. You want structure that suits your relationship and goals without creating unnecessary complexity or discovering problems years later when it actually matters.
Consider two sisters buying an investment property together. Sister A contributes $400,000 to the deposit, Sister B contributes $200,000. Both contribute equally to mortgage repayments going forward. Each sister wants her property share to eventually go to her own children - Sister A has two children, Sister B has three.
If they owned as joint tenants:They each legally own 50% regardless of unequal deposit contributions. When one sister dies, her share automatically passes to the surviving sister - not to her children as intended. Sister A's $400,000 contribution and Sister B's $200,000 contribution both become 50% ownership. The deceased sister's will is irrelevant for the property - survivorship overrides it completely.
As tenants in common:They hold 66.67% (Sister A) and 33.33% (Sister B), reflecting actual deposit contributions. Each sister's share passes under her will to her own children as intended. When Sister A dies, her two children inherit her 66.67% share. When Sister B dies, her three children inherit her 33.33% share. The ownership structure matches their estate planning intentions and protects each sister's actual investment level.
This example shows how ownership structure affects both contribution fairness and estate planning outcomes. Tenants in common allows these sisters to structure ownership that reflects their commercial reality and supports their family intentions.
You have ownership structure documented correctly in your property purchase, reflecting your relationship context and estate planning intentions. You understand exactly what happens if circumstances change - relationship ends, someone dies, or financial contributions shift over time.
Your ownership structure works with your estate planning rather than against it. Your will controls your property share (if tenants in common) or you've confirmed automatic survivorship suits your intentions (if joint tenancy). Unequal contributions are reflected accurately, or you've confirmed equal ownership matches your situation.
You're not discovering three years later that your ownership structure doesn't do what you thought it did. Both co-owners understand what they actually own and what happens in various scenarios. If circumstances change, you know whether your ownership structure needs updating and have addressed that before problems arise.
The structure protects both co-owners appropriately while supporting your individual goals - whether that's investment partnership clarity, estate planning for blended families, or simple shared ownership with aligned intentions.
Before we work together:You're uncertain which ownership structure suits your relationship, what happens if circumstances change, and whether your choice affects your estate planning or tax position.
What we do together:We review your relationship context, financial contributions, estate planning intentions, and family circumstances. I explain how each ownership structure affects your specific situation and help you choose structure that protects both co-owners and supports your goals. For investment partnerships or complex situations, we discuss co-ownership agreements that complement your ownership structure with clear decision-making frameworks and exit provisions.
After we work together:You have ownership structure documented correctly from the start, supporting both your current relationship and future intentions. You understand what happens if circumstances change and have addressed potential complications before they arise. Your property ownership works with your overall estate planning and financial structure rather than creating conflicts.
Timeline: Property purchase transactions typically complete within 6-8 weeks from contract exchange. Ownership structure decisions occur during contract preparation.
Investment: Property purchase legal work includes ownership structure advice as part of comprehensive transaction handling. A consultation clarifies what's involved in your specific situation and the investment required.
Get advice before purchasing if:
Follow up if:
Yes, and this makes sense for blended families or when spouses want to leave their share to specific beneficiaries. Married status doesn't require joint tenancy - many married couples use tenants in common for legitimate estate planning reasons, particularly with children from previous relationships.
This process is called severance. It involves specific documentation and registration with NSW Land Registry Services. Professional guidance ensures the change is properly recorded and legally effective. Getting this right matters because improperly documented severance creates uncertainty about ownership structure when it matters most.
Not at all. Tenants in common simply means you have different estate planning intentions, unequal contributions, or want individual control over your shares. Many healthy relationships - business partnerships, family investments, blended family situations - use tenants in common for legitimate commercial and estate planning reasons that have nothing to do with trust.
Yes - shares can reflect actual financial contributions or agreed ownership proportions. For example, 70/30, 60/40, or 80/20 splits are common when contributions differ or when parents buy with adult children. This protects each owner's actual investment level and creates fairness that equal shares wouldn't provide.
Capital gains tax and negative gearing deduction treatment depends on actual ownership structure and property use. Main residence exemption rules apply differently if one owner occupies the property while the other doesn't. Professional tax advice should consider your complete financial position alongside ownership structure - the interaction between property ownership, usage, and taxation is specific to your circumstances.
