If two or more people are buying a property together, there is an important question to consider:
How will the property be owned?
In Victoria, co-owners may generally hold property as joint tenants or tenants in common.
The choice can have important consequences, particularly if one owner dies, wants to transfer their interest or the owners have different financial contributions.
Consumer Affairs Victoria confirms that the Transfer of Land records whether co-owners hold property jointly or as tenants in common.
This article explains the difference in plain English.
What does joint ownership mean?
Joint ownership means two or more people are registered as owners of the same property.
For example:
- A couple buying a home
- Two family members buying an investment property
- Friends buying property together
- Business partners purchasing property
When there is more than one buyer, the way ownership is recorded becomes important.
What are joint tenants?
When property is held as joint tenants, the co-owners generally hold the property together rather than having separate defined shares.
One important feature is what happens when one joint tenant dies.
Consumer Affairs Victoria explains that if property is held jointly and one owner dies, ownership automatically passes to the surviving owner or owners.
For example:
Sarah + John → Joint tenants
If Sarah dies, John’s ownership generally continues as the surviving joint tenant.
The property does not simply pass through Sarah’s Will in the same way as an interest held as tenants in common.
What are tenants in common?
Tenants in common hold defined interests in the property.
The shares do not necessarily have to be equal.
For example, three people could own a property in different proportions, depending on the arrangement recorded in the transfer.
Consumer Affairs Victoria explains that tenants in common effectively hold shares, which may be equal or unequal, and each has the right to dispose of their share as they see fit.
For example:
Sarah – 50%
John – 50%
or:
Sarah – 70%
John – 30%
The ownership proportions should be properly documented.
What is the main difference?
The simplest way to understand the distinction is:
Joint tenants
- Owners hold the property jointly.
- There are no separate defined shares in the same way as tenants in common.
- If one owner dies, their interest generally passes to the surviving joint tenant(s).
Tenants in common
- Each owner has a defined share.
- The shares can be equal or unequal.
- An owner’s share can generally be dealt with separately, including through their estate.
The choice should be considered carefully before the property is purchased.
What happens if one joint tenant dies?
This is one of the most important differences.
If property is held as joint tenants, the surviving joint tenant or tenants generally become entitled to the deceased owner’s interest by survivorship.
This is different from tenants in common.
If you are considering how property should be owned, you should consider your estate planning circumstances and obtain legal advice where appropriate.
What happens if one tenant in common dies?
If a property is held as tenants in common, the deceased owner’s share generally forms part of their estate.
The share does not automatically pass to the other co-owner simply because they are a co-owner.
The deceased owner’s Will and estate administration may therefore become relevant.
The deceased estate article on our website explains some of the conveyancing issues that can arise when property forms part of an estate.
Can we own the property in unequal shares?
Yes, tenants in common can hold different ownership shares.
For example:
- 50% / 50%
- 60% / 40%
- 70% / 30%
The appropriate ownership structure depends on the circumstances.
If the buyers are contributing different amounts towards the purchase price, they may want to discuss how the ownership should be recorded before settlement.
What if one person is paying more of the deposit?
This is an important issue to discuss before buying.
For example, one buyer may contribute:
$100,000 deposit
while the other contributes:
$50,000
That does not automatically determine how the property will be legally owned.
The buyers should discuss the intended ownership arrangement and obtain appropriate advice before the transfer is prepared.
If the parties intend to hold unequal interests, tenants in common may be relevant, but the correct arrangement depends on their circumstances.
Do joint tenants have equal ownership?
Joint tenancy does not operate in the same way as tenants in common, where each person’s percentage share is separately stated.
If you want the ownership to reflect specific percentages, the parties should discuss whether holding the property as tenants in common is appropriate.
Can we change from joint tenants to tenants in common later?
It may be possible to change the way property is held after purchase.
However, changing ownership can involve legal, conveyancing and potentially tax or duty consequences depending on the circumstances.
It should not be treated as a simple administrative change.
If you are considering changing the ownership structure, obtain appropriate advice before taking action.
Can tenants in common sell their share?
A tenant in common has a separate interest in the property.
Consumer Affairs Victoria explains that tenants in common have the right to dispose of their share as they see fit.
However, selling or transferring an interest in property can involve contractual, legal, tax and duty considerations.
If you are considering selling or transferring your share, obtain appropriate advice first.
Which ownership structure should couples choose?
There is no single ownership structure that is right for every couple.
For example, a married couple may choose joint tenancy because of the survivorship feature.
Another couple may choose tenants in common because they want defined ownership shares.
The right structure depends on the buyers’ circumstances, financial arrangements, estate planning and intentions for the property.
Your conveyancer can explain the conveyancing implications, but legal or estate-planning advice may also be appropriate.
What about friends or family members buying together?
Friends and family members should carefully consider how the property will be owned before signing.
Important questions may include:
- How much is each person contributing?
- What percentage will each person own?
- Who will pay the mortgage?
- Who will pay rates and other expenses?
- What happens if one person wants to sell?
- What happens if one person dies?
- What happens if the relationship between the owners changes?
A separate agreement between co-owners may also be appropriate depending on the circumstances.
What should I decide before settlement?
Before settlement, make sure your conveyancer knows:
- The full name of each purchaser
- The intended ownership structure
- Whether you want joint tenancy or tenants in common
- If tenants in common, the intended shares
- Any relevant company or trust structure
- Your lender’s requirements
- Any other ownership arrangements
The Transfer of Land records the ownership structure, so it is important that the arrangement is correct before it is lodged.
Can I change my mind at settlement?
Do not leave the ownership structure decision until the last minute.
The Transfer of Land and other settlement documents need to be prepared correctly.
If you want to change the way the property will be owned, tell your conveyancer as early as possible.
Last-minute changes can create additional documentation and may affect settlement arrangements.
Joint tenants vs tenants in common — simple example
Imagine Sarah and John are buying a $1 million property.
Option 1: Joint tenants
Sarah and John own the property jointly.
If Sarah dies, her interest generally passes to John by survivorship.
Option 2: Tenants in common
Sarah and John own the property as tenants in common in equal shares.
Sarah owns a 50% interest and John owns a 50% interest.
If Sarah dies, her 50% interest generally forms part of her estate rather than automatically passing to John.
The actual legal and estate consequences depend on the circumstances.
What should buyers consider before choosing?
Before deciding how to hold the property, consider:
- Who is buying the property?
- How much is each person contributing?
- Do the owners want equal or different interests?
- What should happen if one owner dies?
- Are there estate planning considerations?
- Could one owner want to sell their interest in the future?
- Is there a company or trust involved?
- Are there tax or duty considerations?
- Does the lender have any requirements?
If you are unsure, obtain appropriate advice before settlement.
Common mistakes to avoid
Assuming joint tenants and tenants in common are the same
They are different forms of ownership and can have different consequences.
Choosing based only on who paid the deposit
The deposit contribution does not automatically determine the legal ownership structure.
Forgetting about what happens on death
The survivorship difference is an important consideration.
Leaving the decision until settlement
Tell your conveyancer your intended ownership structure early.
Assuming you can change it later without consequences
Changing ownership after purchase can involve additional legal, tax, duty or conveyancing considerations.
How can Prox Conveyancing help?
At Prox Conveyancing, we provide professional conveyancing services for buyers throughout Victoria, from contract through to settlement.
If you are buying with another person, we can help you understand the conveyancing requirements for recording the intended ownership structure.
Where your circumstances involve estate planning, complex financial arrangements, trusts, companies or other legal issues, you may also need advice from an appropriately qualified legal or tax professional.
Frequently Asked Questions
What is the difference between joint tenants and tenants in common?
Joint tenants generally own the property together, with survivorship applying when one owner dies. Tenants in common hold defined shares, which can be equal or unequal.
Which is better, joint tenants or tenants in common?
There is no single option that is right for everyone. The appropriate structure depends on the buyers’ circumstances and intentions.
Can tenants in common have unequal shares?
Yes. Tenants in common can hold defined shares that are equal or unequal.
What happens if a joint tenant dies?
The deceased owner’s interest generally passes to the surviving joint tenant or tenants by survivorship.
What happens if a tenant in common dies?
The deceased owner’s share generally forms part of their estate and is dealt with through the estate administration process.
Can I change from joint tenants to tenants in common?
It may be possible, but the legal, tax, duty and conveyancing consequences should be considered before making the change.
Can two people buy a property in different percentages?
Yes. Where appropriate, tenants in common can hold different ownership shares.
Should I speak to my conveyancer before choosing?
Yes. Your conveyancer can explain the conveyancing requirements. Depending on your circumstances, you may also need legal or estate-planning advice.
Final Thoughts
If you are buying property with another person, deciding how the property will be owned is an important part of the purchase.
Joint tenants and tenants in common are different ownership structures, particularly when it comes to defined ownership shares and what happens if one owner dies.
Make sure your intended ownership structure is discussed before the transfer documents are prepared.
About the Author
Meet Sally
Sally Kwok is a Licensed Conveyancer and the Director of Prox Conveyancing. With more than 16 years of experience in the conveyancing industry, she is committed to helping buyers and sellers navigate Victorian property transactions with confidence. Sally is passionate about providing clear communication, practical guidance and personalised service throughout every stage of the conveyancing process.
👉 Learn more about Sally on our About page.
About Prox Conveyancing
Prox Conveyancing is a Victorian conveyancing practice providing professional conveyancing services for residential property transactions across Victoria. We assist buyers, sellers, investors and families with a wide range of conveyancing matters, delivering personalised service, transparent communication and professional support from contract through to settlement.
👉 Learn more about Prox Conveyancing on our About page.
This article provides general information only and is not legal advice. Every property transaction is unique, and the information above may not apply to your particular circumstances. If you require advice about your specific situation, please contact a qualified legal professional or licensed conveyancer.