[Date: 23 April 2021]
What is the difference?
If you are buying a property with at least one other person, you inevitably need to make an important decision at the outset as to how you wish to own the property, which is also known as the manner of holding.
The 2 options available to you are as ‘joint tenants’ or ‘tenants in common’.
Both forms of tenancy give all people purchasing the property a legal interest in the property, however there are some distinct differences between the two.
In a joint tenancy, all people who purchased the property own the property jointly (but no party owns a discernable share of that property). This means that if one of the owners of the property dies, their interest in the property is passed to the other owner(s) upon their death. The property never forms part of the deceased owner’s estate as there is a right of survivorship to the other joint tenant(s).
Tenancy in Common
In a tenancy in common, each person who purchases the property owns their own individual interest in the property. For example, if a couple purchase a property together, they may own 50% of the property each, or one partner may own a larger stake in the property than the other, depending upon the proportion agreed between the parties at the outset. A tenancy in common has no right of survivorship, so the deceased’s interest in the property will form part of the deceased’s estate and be distributed in accordance with the deceased’s Will.
When should I choose joint tenancy?
A joint tenancy is most commonly chosen where you are purchasing a property with a spouse or partner. This allows the property to pass to the surviving spouse or partner upon the death of the other and avoids the lengthy process in having to wait for probate to be granted for the property to be dealt with.
When should I choose tenancy in common?
Tenancy in common is often selected where you are purchasing a property with someone other than a partner and where you do not want your interest in the property to pass to the other owner upon death. It also is more appropriate where you are purchasing a property in unequal shares with another (for example, you contribute 25% of the proceeds and the other party contributed 75%).
It should also be noted that in some instances, selecting tenancy in common rather than joint tenants may provide some taxation benefits.
Which type of tenancy is right for me?
If you have any further queries regarding the difference between joint tenancy and tenancy in common, or if you would like an experienced solicitor to handle the conveyancing of your property, please contact the Zed Legal team – [email protected]Zed Legal’s blog and articles are made available for educational purposes only as well as to provide general information – but not to provide legal advice.
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