When two or more people buy property together, they must elect between two ownership structures: joint tenancy or tenancy in common. The election is made on the contract and registered on title. The structures look almost identical day-to-day but have radically different consequences when one owner dies, one wants out, or the relationship breaks down. Couples who default to joint tenancy without thinking can find themselves in a position they didn’t intend; investors who choose joint tenancy instead of tenancy in common may forfeit substantial estate planning flexibility.
This guide explains the two structures, when each is appropriate, and how to change between them after settlement if circumstances change.
The structures — head-to-head
| Aspect | Joint tenancy | Tenancy in common |
|---|---|---|
| Ownership shares | Equal — must be 50/50 for two parties | Any proportion — 50/50, 70/30, etc. |
| Death of one owner | Right of survivorship — deceased’s share auto to surviving owner | Deceased’s share goes via will / intestacy |
| Will / estate plan effect | Bypassed — survivorship rules | Honoured — share devolves per will |
| Sale needs both consenting | Yes | Yes (or court partition order) |
| Mortgage in one party’s name only | Not generally permitted | Possible (against own share) |
| Bankruptcy of one owner | Can break the joint tenancy; complex | Only that owner’s share at risk |
| CGT on death | Cost base inherited at original cost | Cost base reset to market value at death |
| Best for | Married/de facto couples | Investors, business partners, blended families |
Right of survivorship — joint tenancy’s defining feature
When a joint tenant dies, their share automatically transfers to the surviving joint tenant(s). The deceased’s will is irrelevant — the survivorship rule overrides.
Implications:
- Surviving joint tenant becomes 100% owner. No probate needed for the property.
- Estate of the deceased gets nothing from the property. Any beneficiaries named in the will are bypassed.
- Quick and inexpensive transfer — typically completed in 4–6 weeks at $200–$500.
- No CGT event on death (cost base is inherited).
When joint tenancy is appropriate
- Married or de facto couple wanting automatic transfer on death
- Wills that intend the surviving partner to receive everything
- No children from prior relationships needing protection
- Both contributing equally to the property
When tenancy in common is appropriate
- Investment property with multiple co-investors
- Mixed contribution (one party provided 70% of deposit, the other 30%)
- Blended families — protecting children from prior relationships
- Estate planning that leaves shares to specific beneficiaries
- Business partners purchasing together
- Parent + adult child purchasing together
Changing the structure later — severance and conversion
Severing a joint tenancy
A joint tenancy can be severed (converted to tenancy in common) unilaterally — without the other owner’s consent. Either owner can lodge a Notice of Severance with Land Use Victoria. Cost: $300–$800 in legal fees plus registration.
After severance, both owners hold as tenants in common in equal shares. The right of survivorship is broken. Each can leave their share via will.
Converting tenancy in common to joint tenancy
Converting in the other direction requires both owners’ consent and a transfer document. More complex, may trigger stamp duty.
Stamp duty implications
| Transaction | Stamp duty treatment |
|---|---|
| Initial purchase — joint tenancy or TIC | Standard duty on full price |
| Joint tenant dies — survivorship transfer | No duty |
| Severing joint tenancy → TIC equal shares | No duty (no value transfer) |
| Adjusting TIC shares | Duty on transferred share value |
| Spousal transfer (relationship breakdown) | Exemption available with court order |
Real-world scenarios
Scenario 1: Married couple, both contribute equally
Joint tenancy is typical. Both contribute equally. On death of either, the survivor takes 100%. Aligns with most couples’ intentions.
Scenario 2: Couple, one contributed deposit from inheritance
Tenancy in common with shares reflecting contribution (e.g. 65/35). Allows the larger contributor to leave their share to children from a prior relationship if desired.
Scenario 3: Two siblings buying as investment
Tenancy in common with equal shares. Each can leave their share in their will. Each can mortgage their share separately.
Scenario 4: Parent + adult child buying together
Tenancy in common. Shares reflect contributions. Parent’s share can pass to other children on death rather than the co-owner child receiving everything.
What to do at contract signing
- Discuss the choice with co-buyers — don’t default
- Consider estate planning implications
- For TIC, agree on share proportions in writing
- Both buyers should have wills consistent with the choice
- For complex situations, get specialist estate-planning advice
Ready to check your contract? Upload your Section 32 or Contract of Sale at precontractreview.com for a pre-contract check — typically in just a few minutes.