When two or more people buy property together, the way they hold title decides what happens on death, how much each owner can claim and how easily one can leave. Asset Conveyancing handles co-ownership structures at purchase and changes later, in South Australia, Victoria, New South Wales, Queensland, Western Australia and Tasmania.
What is the difference between joint tenants and tenants in common?
Joint tenants own the whole property together, with no separate shares, and the survivor takes it all when one owner dies. Tenants in common each own a defined share, which passes under that owner’s will.
Survivorship overrides a will. If two joint tenants each leave everything to their own children, the survivor still takes the whole property. That suits many couples, but rarely anyone else.
Can co-owners hold unequal shares?
Yes, but only as tenants in common. Joint tenants always hold equally, so unequal ownership must be registered as tenancy in common in stated shares, such as 70 and 30. The registered shares are the starting point for any later division, so they should reflect what was actually agreed.
How do you choose the right structure when buying?
Decide before the transfer is prepared, because the structure is registered at settlement and changing it later costs more and may attract duty.
Ask: who should get my share if I die, and are we contributing equally? If the answers are “my co-owner” and “yes”, joint tenancy may suit. Otherwise, tenancy in common with a written agreement usually fits better. We raise this as part of our buyer conveyancing work.
Can you change how co-owners hold title?
Yes. Joint tenants can become tenants in common by severance, and tenants in common can become joint tenants or change their shares by registering a transfer between themselves. A change that moves value between owners, such as adjusting shares, can attract transfer duty and capital gains tax. Check with your state revenue office and your accountant before signing.
How do you sever a joint tenancy?
Severance is usually done by registering a document at the land titles office that converts the joint tenancy into a tenancy in common in equal shares. In most states one joint tenant can sever without the other’s consent, although the forms and notice requirements differ.
Act promptly: if a joint tenant dies before severance is registered, survivorship can still apply. Our guide on severing a joint tenancy explains the process.
Update your will at the same time. After severance your share passes under your will. If your will is out of date or you have none, your share may not go where you intend.
Do friends, family or investors buying together need a co-ownership agreement?
Yes. The title records who owns what, but not who pays the mortgage, how costs are shared or how an owner exits. A written co-ownership agreement should cover:
- each owner’s contribution to the deposit, purchase costs and improvements
- who pays the mortgage, rates, insurance and repairs, and what happens if someone stops paying
- how an owner exits, including a first right for the others to buy and how the price is set
- what happens on death, separation or bankruptcy of an owner
- how disputes are resolved before anyone goes to court
Our guides on buying property with someone else and transferring property between family members cover these issues in more depth.
What happens if co-owners disagree about selling?
Any co-owner can generally apply to a court or tribunal for an order that the property be sold and the proceeds divided, or that one owner buy out the other.
Each state has its own legislation and forum. In Victoria, applications go to VCAT; elsewhere they generally go to the Supreme Court or another state court. The division of proceeds can be adjusted for unequal contributions. Court work needs a solicitor; our role is the title, the transfer or contract, mortgage discharge and settlement. If the dispute follows a separation, see family property transfers.
Common questions about property co-ownership
Should a married couple be joint tenants or tenants in common?
Many couples choose joint tenancy so the survivor takes the property without probate. Tenancy in common can suit couples with children from earlier relationships, unequal contributions or estate planning needs such as testamentary trusts. Consider your wills and family situation together before choosing.
Do I need my co-owner’s permission to sever a joint tenancy?
In most states, no. One joint tenant can usually sever without the other’s agreement, although some states require written notice to the other owners and the forms differ. Severance then converts the ownership into equal shares as tenants in common.
Can I sell my share of a jointly owned property?
Legally, a co-owner can usually transfer their own interest, and a transfer by a joint tenant severs the joint tenancy. In practice few buyers want part of a property, and a shared mortgage needs the lender’s consent. A buy-out by the other owner, or a sale of the whole property, is far more common.
Can a court force the sale of a co-owned property?
Yes. In every state a co-owner can apply for an order for sale or division of co-owned land, and the court or tribunal decides how proceeds are divided, taking unequal contributions into account. Proceedings are costly and slow, so a negotiated outcome or an agreement made at purchase is usually better.