What is best, joint tenancy or tenants in common?
Which type of ownership is best, depends on your needs. If you’re buying as a couple, joint tenancy is a popular choice. It simplifies things if one partner dies – the other automatically inherits the property, which avoids probate and inheritance tax issues. This mean your share in the property is secure, however you can’t choose to leave your share to someone else.
If this is what you’d like to do, consider tenancy in common. Do bear in mind that leaving your share to someone else could cause disputes and your spouse/partner may be forced out of the home.
If one person is contributing more to the deposit, for example, and you want this reflected in the ownership, tenancy in common is the better option.
One of the disadvantages of tenants in common is that it’s less straightforward. It’s advised that you get a Deed of Trust to confirm your share and what will happen if the property is sold or bought out. This will incur an additional solicitor’s fee; but it makes it simpler if you want to sell.
You can also create a Deed of Trust or Cohabitation Agreement with a joint tenancy if you want to lay out the legal rights and financial interest of co-owners in the event of a separation.
Joint tenancy means each owner automatically gets half each if you separate (if it’s two co-owners), even if one has invested more money in the property. It can also be difficult to force your partner to sell with a joint tenancy.
With tenants in common, each person can own an unequal share, and this will be reflected in what they receive if the property is sold.