More than one person buying? You need to know this.
Up to four people can jointly own a property, and before the property is registered into your names it is necessary that you decide on the legal structure this ownership takes.
You can own a property as either ‘joint tenants’ or ‘tenants in common’. The type of ownership affects what you can do with the property if your relationship with a joint owner breaks down or if one owner dies.
Joint tenancy is typically used by ‘first time’ married couples or people in civil partnerships with no children.
As joint tenants (sometimes called ‘beneficial joint tenants’):
you have equal rights to the whole propertyno party holds a distinct share of the propertythe property automatically goes to the other owners if you dieyou can’t pass on your ownership of the property in your will
You can change from being joint tenants to tenants in common, for example if you divorce or separate and want to leave your share of the property to someone else. This can be done by either party without the others consent.
Tenants in common
Tenants in common is typically used by unmarried couples, couples in a second marriage and by those who have made unequal contribution to the deposit.
As tenants in common:
you can own different shares of the propertythe property doesn’t automatically go to the other owners if you dieyou can pass on your share of the property in your will
You can change from being tenants in common to joint tenants, for example if you get married and want to have equal rights to the whole property.
Tenants in common hold the property in specific proportions and so it is essential that there is a declaration of trust either in the deeds or as a separate document declaring the proportions held. Without this the law will assume it is held 50/50.
If you are married and the property is registered to you both as joint owners, it is important for you to understand that should you get divorced the court looks at many factors in deciding who gets what and the legal structure of ownership is not necessarily the deciding factor.
A conveyancer can consult with you over the personal implications of the legal structure of ownership, however they are not tax advisors and if there is a chance that the ownership structure can have tax implications, then you should always discuss this with a Tax Advisor.