When buying a property with someone else whether it’s your partner, a family member, or a friend. One of the key decisions you’ll need to make is how you want to own it together. There are two main ways to do this: joint tenants and tenants in common.  

These terms can be confusing, but they have important legal and financial consequences. Here is a guide to help you understand the difference: 

Joint Tenants 

If you own a property as joint tenants, it means that you both own the whole property equally. Since you don’t own separate shares, you both have full and equal rights to the entire property. Because of this it means that if one of you dies whilst still owning the property it is automatically passed to the other, regardless of what the Will says. This is known as the “right of survivorship”. 

This type of ownership is most common for married couples and civil partners as well as people who want their share to go to the other owner automatically such as parents and children. 

However, joint tenancy might not be suitable if you’re contributing different amounts to the purchase, or if you want your share to go to someone else, for example children. 

Tenants in Common 

If you own a property as tenants in common it means that you each own a specific share of the property, these shares can be equal (50/50) or unequal (e.g 70/30). The main benefit of being tenants in common is that the property does not automatically go to the other owner but whoever is named in your Will.  

This type of ownership is most suitable for if each party is contributing different amounts (whether this is for the deposit, mortgage or both). It is also very helpful if you are buying with someone who is not your spouse or partner or someone you do not want to inherit your share. Most importantly this type of ownership is for those who want to protect their financial interests, for example in case of relationship breakdown. 

In order to properly record a tenants in common ownership it is best to create a declaration of trust and register this with the land registry. 

Why the choice matters 

The decision between joint tenancy and tenancy in common can have major consequences for inheritance planning, family arrangements, and even tax. For couples who wish for their partner to inherit everything a joint tenancy is likely best. However, couples who perhaps have children from separate partners and want to ensure their children’s inheritance, a tenancy in common with a deed of declaration and a Will would be best. All of these services we can happily assist with at Heppenstalls. Please also note that no matter which type of tenancy you choose it can always be changed in the future. 

How we can help 

Deciding whether to own property as joint tenants or tenants in common is arguably the most important step when buying a home or reviewing your estate planning. At Heppenstalls, our property and private client specialists can advise you on the best option for your circumstances and guide you through the process. 

If you would like advice specifically tailored to your situation, please get in touch with our team today.