When you purchase property in Queensland with a partner, friend, or family member, you’ll need to figure out if you should buy as joint tenants or tenants in common. 

While the difference between these two forms of ownership might seem technical, it can have significant implications for property ownership, inheritance and estate planning.

Take a look at the difference between joint tenants and tenants in common:

What is joint tenancy?

Joint tenancy is a form of property ownership where all owners hold an equal share in the property. This means each owner has an undivided interest in the entire property, rather than a specific percentage. For instance, if a couple buys a property as joint tenants, they both own the whole property equally.

One of the key features of joint tenancy is the ‘right of survivorship’. This means that if one joint tenant passes away, their share of the property automatically transfers to the surviving joint tenant(s). This automatic transfer bypasses the deceased’s estate and avoids the need for probate/legal proceedings. Consequently, joint tenancy can simplify the transfer of property upon death, which is why it’s often used by married couples or partners.

Joint tenancy also has its limitations. If you wish to sell your share of the property as an individual, you must first end the joint tenancy, which changes the ownership to tenants in common. 

What is tenancy in common?

Tenancy in common, allows each owner to hold a specific percentage of the property. These percentages can vary, so one person might own 50% while another owns 25% and a third person owns 25%. This situation is more likely when people buy property in Queensland as friends, family members or business partners rather than as a couple. 

Unlike joint tenancy, there is no right of survivorship with tenancy in common. When a tenant in common passes away, their share of the property becomes part of their estate and is distributed according to their will or the relevant laws if there is no will. This aspect makes tenancy in common a popular choice for property investors or business partners who want to maintain a defined percentage of ownership and control over their share of the property. It also allows for greater flexibility in estate planning, as each owner's share can be left to heirs or sold independently of the other co-owners. 

If you buy with someone else as tenants in common, it’s most likely the property will be sold if one of you passes away, in order for the value in the asset to be released to the person it is willed to. However, a lawyer can help you explore other potential options. 

What’s right for you?

For Queensland home buyers, the choice between joint tenancy and tenancy in common should align with your personal circumstances and long-term goals. Joint tenancy might be ideal for couples or those who want to ensure that property passes seamlessly to the surviving owner(s) without going through probate.

In contrast, tenancy in common is often preferred by investors or multiple parties who wish to maintain distinct shares of the property. This form of ownership provides more flexibility in managing individual interests and planning for the future.

Need help to decide between joint tenants and tenants in common?

Given the legal implications of these ownership structures, it makes sense to talk to a local property lawyer when purchasing property. An experienced professional can help you understand the implications of each ownership type, assist in drafting appropriate legal documents, and ensure that your choice of ownership aligns with your estate planning and investment goals.

Choosing between joint tenancy and tenancy in common will affect how you manage and eventually transfer your property. Make sure you seek professional advice to make an informed decision that suits your needs and protects your interests.