Joint Tenants vs Tenants in Common in NSW
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When buying property in New South Wales with another person, one of the most critical legal decisions you will make is choosing your type of co-ownership.
In NSW, you must elect to hold the property as either joint tenants or tenants in common. While these terms sound similar, they have vastly different legal consequences — particularly regarding what happens to the property if one owner passes away.
Here is a breakdown of how the two options work under NSW property law to help you determine which structure fits your situation.
Joint Tenants: The Right of Survivorship
Choosing to hold property as joint tenants means that all buyers own the entire property together jointly. There are no distinct, divided shares; you each own 100% of the property as a single legal entity.
The defining characteristic of a joint tenancy is the right of survivorship.
What happens if an owner dies?
If one joint tenant passes away, their interest in the property does not form part of their personal estate. Instead, it automatically transfers to the surviving owner(s), regardless of what is written in the deceased person’s Will.
To formalise this in NSW, the surviving owner simply lodges a Notice of Death with Land Registry Services (NSWLRS) to update the Certificate of Title.
Which ownership groups are most suited to joint tenancy?
This structure is most common for married couples and de facto partners who intend for the family home to seamlessly pass to the surviving spouse without the delays of estate administration.
Tenants in Common: Defined Shares and Estate Flexibility
In contrast, holding property as tenants in common means that each person owns a specific, distinct share of the property. These shares do not have to be equal. For example, one person can own 70% while the other owns 30% — a split often decided based on each person’s financial contribution to the purchase.
There is no right of survivorship if you own the property as tenants in common.
What happens if an owner dies?
If a tenant in common passes away, their specific share in the property is dealt with as part of their deceased estate. It will be distributed strictly in accordance with their Will (or the rules of intestacy if they die without a Will). The surviving co-owner does not automatically inherit the deceased person’s share.
Which ownership groups are most suited to tenants in common?
This option provides maximum flexibility and is highly common for:
- Property investors: where individuals contribute different amounts of capital and want their financial stakes accurately reflected on title.
- Friends or business partners: buying commercial or residential property together.
- Blended families: where an owner wishes to ensure their share of the asset is eventually preserved for children from a previous relationship, rather than automatically passing to a current spouse.
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How We Can Help
Choosing your co-ownership structure is only half the battle. If you opt for a tenancy in common, it is essential to have a valid and up-to-date Will in place to protect your beneficiaries and ensure your estate is distributed as you intend.
Selecting the wrong co-ownership structure can lead to unintended consequences for your estate and your loved ones down the track. Whether you are signing a contract for a new home or looking to sever an existing joint tenancy into a tenancy in common, our experienced property team is here to guide you through the process safely.
Contact our office today to discuss your property and conveyancing needs.
