• If you are buying a property with another person, at the beginning of the property transaction you will be asked whether you wish to own the property as joint tenants or as tenants in common.

    Joint tenancy

    In a joint tenancy, both parties will own the whole property, with no question of differing proportions of ownership (at least initially).

    The crucial feature of this type of ownership is that when you die, the property will automatically pass to the other owner or owners. This will be the case even if you’ve included other wishes for the inheritance of the property in your Will. The technical term for this automatic process is ‘the right of survivorship’.

    Tenancy in common

    There are many reasons why you might not wish for the right of survivorship to operate. Estate planning considerations could apply – for example you may wish to leave the interest in the property to children from a previous marriage, or to a relative other than your partner.

    The property may have been purchased with a brother, sister, distant relative or business partner. If so, it is often more appropriate for the share to be inherited by another party, rather than the other owner of the property. You might also have made unequal contributions to the purchase price and want the ownership of the property to reflect this.

    In circumstances such as these, owning the property as tenants in common may be best for you. In this form of ownership, if one owner dies, their interest in the property will not pass automatically to the other owner or owners, but in line with the terms of their Will.

    With tenancy in common ownership, each person will own a specified proportion of the property. This means that you can stipulate what each person owns. For example, to reflect differing deposit or mortgage contributions. It may also be appropriate to draw up a Declaration of Trust to record the precise split of ownership and how the proceeds are to be divided on a sale. We can advise on what is best for your individual circumstances.

    How to decide whether to purchase a property as joint tenants or tenants in common

    Here are three questions to consider when deciding whether to purchase a property as joint tenants or tenants in common:

    1. Do I want my interest in the property to pass to my spouse or other owner on my death, or to another person? What are the terms of my Will?
    2. Are there differing contributions to the purchase price? If so, do I wish the ownership of the property to reflect this?
    3. Are there any estate planning or tax benefits to owning the property as tenants in common rather than joint tenants? (If you are unsure, our Estate Planning team can help with this).

    What if your circumstances change after buying the property?

    Of course, no-one can predict the future. It may be that your life circumstances change so that the form of ownership you chose when you first purchased the property is no longer appropriate.

    If this has happened, we can look into whether it is best now to change ownership of the property to better suit your current needs.

    Further advice on buying or selling a property

    If you have any questions about whether joint tenancy or tenancy in common is the best option for you, get in touch with our team for advice. Fill out our contact form, email us or call us on 01622 690691.

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