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Understand how your own property ownership is structured so you know how it affects your own circumstances.

There are many ways to own property with other people

Different ownership structures bring different rights and responsibilities so it makes sense to understand the basics.

When a single property is owned by more than one person (or company) it can be owned either as;

  • Joint Tenants, or
  • Tenants in Common

Read in this article


Owning a property as joint tenants

Under the joint tenant's ownership structure, each owner effectively owns the whole asset. In other words, each owner shares ownership equally.

  • You could say they each own 100% of the property equally together.

What happens to the property if one of the joint tenant owners dies?

  • If one owner dies, the other owner receives ownership of the deceased owner’s portion automatically regardless of what may be written in the will of the owner who died.
  • Commonly used for people in relationships together.

Owning a property as tenants in common

Under the tenants in common ownership structure where two (or more) people own an asset as tenants in common, each owner holds their own share of the asset outright. This can be an unequal percentage.
For example:

  • Two owners could together own 60% and 40% respectively.

What happens to the property if one of the tenants in common owners die?

  • If one owner dies, their portion of the property can be left in their will to any individual they choose (and their portion can even be sold to someone - other than the owner of the other portion).
  • It's important to understand - it doesn't automatically pass to the remaining owner.
  • This ownership structure might be used by siblings or friends investing together.

Insight: What happens if you gift a single asset to two people - The Joint Tenancy Presumption.
If someone gives you and your sibling a gift of land the presumption is the ownership split is 50/50. If you were to die the following day, does your 50% interest go into your Will? Or does it, via the joint tenancy survivorship rules, go to your sibling? At law there is a presumption that where property is gifted to two or more people, they receive that property as joint tenants. This is subject to any documented contrary intention.

Ownership can be changed as your circumstances change

The joint tenant ownership structure can be changed

If a joint tenancy is converted to a tenancy in common, each owner can then direct how their share in the property is dealt with in their will.

Changing an ownership structure between existing owners

As there is no change in ownership of the property, transfer duty and tax are not payable. The only transaction cost is generally Government registration fees. You can learn more about that at the Department of Land and Property.

Common life examples:

Property owned by siblings where one later marries

John and his sister Julie, bought an investment property together as joint tenants before either of them was married.

  • After his marriage, John changed the ownership structure to a tenancy in common so that upon his death, his portion of the interest in the property would pass to his new wife rather than automatically to his sister.

Protecting the home from business risks

David and Tracy live in NSW and purchased their family home as joint tenants. A few years later, Tracy established a business and became concerned about losing everything if her business failed.

  • While David is alive, Tracy wants the house to be owned primarily in Davids's name because of the risks involved with running a business.
  • Should David pass away, she wanted it to remain in a testamentary trust shielded from potential any creditors.

David and Tracy decided to sever the joint tenancy ownership structure and convert it to tenants in common so that David can direct his portion of the property be transferred to a trust under his will.

Pro Tip: The different ownership structures of Tenants in Common and Joint Tenancy affect what happens to assets left in a person's Will.

  • Tenants in Common: each owner holds their discrete share of the asset outright. It can be 20% and 80%. Or can be 50% and 50%. Or it can be 34%, 6% and 60%. But it must equal 100%. When a tenant in common dies your interest in the asset goes into your Will. It does not go to the other co-owners.
  • Joint Tenancy: the owners share ownership of the asset equally. It is an ‘undivided interest’. Each owner owns the whole asset. Therefore, if there are two owners they must hold the property 50/50. If there are three owners then it must be a third each. If their interests are unequal then you do not have a joint tenancy. (You would have a Tenancy in Common, instead.) Together, all owners own 100%. There are no separate interests. At death, the remaining owners take the dead owner’s interest automatically. In other words, the dead person cannot get the joint tenancy asset into their Will. They cannot pass their share of the asset under their Will. This is because it automatically passed to the remaining owners. The last owner to die takes the whole asset. People often try and leave a joint tenancy asset into their Will. The gift just fails.


The difference in property ownership structures can have far-reaching (and often surprising) effects on their owners. 

These can include issues about;

  • restrictions on applying for a mortgage
  • using a portion of the equity in the property for another property purchase
  • helping a child with a deposit
  • creditors and bankruptcy issues
  • your will and estate plans.

All these issues change depending upon whether the ownership is structured as joint tenants or as tenants in common. You need to know how your own property ownership is structured and make sure it's appropriate for your own circumstances.

author pic drew browneDrew Browne is a specialty Financial Risk Advisor working with Small Business Owners & their Families, Dual Income Professional Couples, and diverse families. He's an award-winning writer, speaker, financial adviser and business strategy mentor. His business Sapience Financial Group is committed to using business solutions for good in the community. In 2015 he was certified as a B Corp., and in 2017 was recognised in the inaugural Australian National Businesses of Tomorrow Awards. Today he advises Small Business Owners and their families, on how to protect themselves, from their businesses.  He writes for successful Small Business Owners and Industry publications. You can read his Modern Small Business Leadership Blog here. You can connect with him on LinkedIn Any information provided is general advice only and we have not considered your personal circumstances. Before making any decision on the basis of this advice you should consider if the advice is appropriate for you based on your particular circumstance.

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