Buying a property with someone else – whether it’s your partner, a family member, or a friend – is an exciting step. But before you sign any contracts, there’s a question that’s easy to overlook and important to get right: how will you own the property?
The answer comes down to choosing between two forms of co-ownership: joint tenancy and tenancy in common.
In Queensland and New South Wales, this choice determines what happens to your share of the property if you die, separate, or want to sell. It also directly affects your estate planning and how your will interacts with the property. Getting it wrong can have serious – and sometimes irreversible – consequences for your family and your finances.
This guide explains the difference between joint tenants and tenants so you can make an informed decision when purchasing property.
What is joint tenancy?
Joint tenancy is a form of co-ownership where two or more people own a property together in equal shares. There is no percentage split – each owner holds an undivided interest in the whole property.
The defining feature of joint tenancy is the right of survivorship. This means that if one joint tenant dies, their interest in the property automatically passes to the surviving joint tenant or tenants – regardless of what their will says.
Key features of joint tenancy:
- All owners hold equal shares – there is no 60/40 or 70/30 split.
- The right of survivorship overrides any contrary provision in a will.
- One owner cannot sell or transfer their interest without first severing the joint tenancy.
- Commonly used by married couples and partners in long-term relationships.
What is tenancy in common?
Tenancy in common is a form of co-ownership where two or more people each hold a defined, separate share in a property. Those shares can be equal or unequal – they do not have to reflect each person’s financial contribution, though they often do.
Critically, there is no right of survivorship in a tenancy in common. When a tenant in common dies, their share passes according to their will – or, if there is no will, under the laws of intestacy. It does not automatically go to the other co-owner.
Key features of tenancy in common:
- Owners hold defined, separate shares – equal or unequal.
- No right of survivorship – a deceased owner’s share passes through their estate.
- Each owner can generally sell or transfer their share independently.
- Commonly used by investors, friends buying together, and blended families.
Joint tenants vs tenants in common: key differences at a glance
| Joint tenants | Tenants in common | |
|---|---|---|
| Right of survivorship | Yes, automatically | No – the share passes under the will or intestacy |
| Ownership shares | Always equal | Can be equal or unequal |
| Transfer of interest | Requires severing the joint tenancy first | Each owner can transfer their share without the other’s consent |
| Estate planning interaction | The will has no effect on the property | The will governs what happens to each share |
Which ownership structure is right for you?
The right choice depends on your relationship with the other owner, your estate planning goals, and your financial circumstances. Here are the most common scenarios.
Couples buying a family home
Joint tenancy is the most common choice for couples in long-term relationships or married couples purchasing a home together. The right of survivorship provides simplicity – if one partner dies, the property passes automatically to the survivor without the need for a grant of probate over that asset. Our property law team regularly advises couples on structuring their purchase to best protect both partners.
However, joint tenancy is not always appropriate, even for couples. If one or both partners have children from a previous relationship, tenancy in common may be preferred to ensure each partner’s share passes in accordance with their specific estate plan – protecting the interests of children who are not children of the current relationship.
Investors and friends buying together
Tenancy in common is almost always the better option for property investors, friends co-purchasing, or siblings buying together. Each owner can hold a share proportional to their financial contribution, and that share can be dealt with independently – sold, mortgaged, or left to a beneficiary – without affecting the other co-owners.
It also has potential tax benefits. The Australian Taxation Office (ATO) treats joint tenants as if they hold equal shares for capital gains tax (CGT) purposes. If one investor has a higher tax rate and holds a smaller financial stake, tenancy in common with appropriately structured shares may produce a more favourable outcome. Always obtain tax advice specific to your circumstances.
Blended families and estate planning
For blended families, the choice between joint tenancy and tenancy in common can be one of the most consequential estate planning decisions you make. The right of survivorship in a joint tenancy can inadvertently disinherit children from a prior relationship. If protecting your children’s inheritance is a priority, tenancy in common – combined with a carefully drafted will – gives you much greater control.
Can you change your ownership structure later?
Yes, but it requires a formal legal process, not simply an agreement between the parties.
Severing a joint tenancy requires lodgement of the appropriate form with the relevant land registry. In Queensland, this is done through the Queensland Land Registry. In New South Wales, lodgement is made through NSW Land Registry Services. The severance takes effect from registration, and the parties then hold as tenants in common in equal shares unless otherwise agreed.
Stamp duty (transfer duty) implications should also be considered before any change is made. Depending on the circumstances, a duty liability may arise on a transfer or change of ownership structure. Legal advice is essential before proceeding.
A note for property owners on the Queensland-New South Wales border
The fundamental rules governing joint tenancy and tenancy in common are consistent across Queensland and New South Wales. However, there are differences in the procedural requirements, registration forms, and transfer duty rules that apply in each state.
For buyers in the Coolangatta-Tweed corridor – where it is common to purchase property in both states – it is important to work with a solicitor who practises in both Queensland and New South Wales. At HQF Lawyers, our conveyancing team regularly acts for clients on both sides of the border and understands the specific requirements of each jurisdiction.
Common misconceptions
“My will protects my share even as a joint tenant.”
This is one of the most common misunderstandings in property law. It does not. The right of survivorship overrides your will. If you hold property as a joint tenant and want your share to go to someone other than the surviving co-owner, you need to sever the joint tenancy before you die.
“Joint tenancy is the default if we don’t specify.”
Not always. The default varies depending on the jurisdiction and circumstances of purchase. You should always specify clearly which form of ownership you intend at the time of purchase – do not leave it to assumption.
“Tenants in common means we each own a specific part of the property.”
Not quite. Each tenant in common holds an undivided share – a proportionate right to the whole property, not an exclusive right to a particular room or section. You cannot fence off ‘your’ 40% and exclude the other owner from it.
Frequently asked questions
QCan I be both a joint tenant and a tenant in common on the same property?
Yes, in some circumstances. For example, two couples purchasing together might each hold as joint tenants within their couple, while the two couples hold as tenants in common between them. This kind of hybrid structure requires careful legal drafting to ensure it achieves the intended outcome.
QWhat happens to a joint tenancy if we separate?
A joint tenancy does not automatically sever upon separation or divorce. Until the joint tenancy is formally severed by lodgement with the land registry, the right of survivorship continues to operate. This means if one party dies before severance, the other takes the whole property – regardless of any separation agreement. Severing the joint tenancy as soon as possible upon separation is strongly advisable.
QDoes tenancy in common affect my ability to get a mortgage?
Not inherently – lenders regularly lend to co-owners holding as tenants in common. However, all co-owners will typically be jointly and severally liable for the whole loan, regardless of their respective ownership shares. This means if one owner defaults, the lender can pursue the other for the full debt. Obtain both legal and financial advice before co-purchasing.
QDo I need a will if I own property as a joint tenant?
Yes – and this is important. While the right of survivorship means your share of jointly held property passes outside your estate, you will almost certainly have other assets that need to be dealt with by a will. Circumstances also change – if the joint tenancy is ever severed, your share will then fall into your estate on death. Everyone who owns property should have a current, properly drafted will.
Disclaimer: The contents of this article are considered accurate as at the date of publication. The information contained in this article does not constitute legal advice. Readers should seek legal advice about their specific circumstances.
