Joint Tenants vs Tenants in Common in NSW

When two or more people buy or own property together in New South Wales, an important decision is whether to hold the property as joint tenants or as tenants in common. The choice can affect what happens to an owner’s interest on death, estate planning and how ownership shares are recorded.

What is joint tenancy?

Joint tenants own the property together and the right of survivorship generally applies. If one joint tenant dies, that person’s interest ordinarily passes to the surviving joint tenant or tenants rather than forming part of the deceased owner’s estate.

What is tenancy in common?

Tenants in common hold separate shares in the property. Those shares can be equal or unequal. When a tenant in common dies, their share does not pass automatically to the other owner. Instead, it forms part of their estate and is dealt with according to their Will or, if there is no valid Will, the applicable intestacy rules.

What is the main difference?

The key distinction is what happens to an owner’s interest on death. Joint tenancy generally involves survivorship, while a tenant in common can leave their separate share through their estate. Tenancy in common can also accommodate different ownership proportions.

Which ownership structure should you choose?

The appropriate structure depends on the owners’ circumstances and objectives. Matters to consider can include contributions to the purchase, estate-planning intentions, family circumstances, taxation and land-tax considerations, asset-protection issues and any agreements between the owners.

Legal advice should be considered together with appropriate taxation and financial advice where relevant. The ownership structure should ideally be considered before contracts are exchanged or the transfer is completed.

Can joint tenancy be changed to tenancy in common?

In appropriate circumstances, the manner in which co-owned property is held can be changed. The legal, duty, tax, estate-planning and practical consequences should be considered before changing an existing ownership arrangement.

Property ownership and estate planning

The way property is owned should be considered as part of broader estate planning. A Will does not ordinarily control an interest that passes automatically to another owner by survivorship, while a tenant-in-common interest can generally be dealt with through the owner’s estate.

Read more about our Property Law and Conveyancing services, Probate, Wills and Deceased Estates and NSW Land Tax.

Speak to Russell Kelly & Associates

Russell Kelly & Associates can advise buyers and property owners about joint tenancy, tenancy in common and other property ownership considerations in New South Wales.

This information is general in nature and does not constitute legal, taxation or financial advice. The consequences of a particular ownership structure depend on the owners’ circumstances and applicable law.