Joint property ownership in Perth is a common arrangement among couples, family members, or business partners who buy property together. It’s important to understand the rules and legal implications before entering into such an agreement. The structure of your property ownership determines your rights, responsibilities, and what happens if one owner wants to sell or passes away.
In Australia, and particularly in Perth, there are two main ways to hold property jointly: as joint tenants or as tenants in common. While both options allow multiple people to co-own a property, they work very differently when it comes to decision-making, ownership shares, and the transfer of ownership.
Understanding Joint Tenants and Tenants in Common
The most common types of joint property ownership in Perth are:
Joint Tenants
Joint tenancy is where two or more people own a property together equally. Each person holds an identical interest in the entire property. One of the most significant aspects of joint tenancy is the right of survivorship. This means if one owner dies, their share automatically passes to the surviving owner or owners. It does not form part of the deceased’s estate and cannot be passed on in a will.
This is the most common arrangement for married couples or de facto partners who want the property to automatically transfer to the surviving partner upon death.
Tenants in Common
Tenants in common is a more flexible form of ownership. It allows each owner to hold a defined share of the property – for example, one person may own 60 percent and the other 40 percent. These shares can be equal or unequal and are recorded on the property title.
The key difference is that there is no right of survivorship. If one owner dies, their share becomes part of their estate and is distributed according to their will. This is often preferred by business partners, investors, or blended families where each party wants to keep control of their share.
Legal Requirements for Joint Property Ownership in Perth
If you’re planning to enter into joint property ownership in Perth, there are several legal aspects you must consider:
- Property Title Structure: You need to choose between joint tenants or tenants in common when you purchase the property. This decision is recorded on the Certificate of Title.
- Written Agreement: It’s strongly advised to have a written agreement outlining responsibilities such as contributions to mortgage repayments, property maintenance, and what happens if someone wants to exit the arrangement.
- Legal Advice: A property settlement lawyer in Perth can help you understand your rights and avoid costly disputes down the track.
- Stamp Duty and Tax Implications: Be aware that changing the ownership structure later may attract stamp duty and capital gains tax. Always consult a legal or tax professional.
Pros and Cons of Joint Property Ownership
Advantages:
- Shared financial responsibility
- Easier to get approved for a mortgage
- Can make property investment more accessible
- Flexibility in ownership arrangements with tenants in common
Disadvantages:
- Disputes may arise if one party wants to sell or refinance
- Joint tenants lose the ability to leave their share to someone else
- Legal and tax complications if the ownership structure changes
What Happens if You Want to Sell or if One Owner Dies?
With joint tenants, if one person passes away, the property automatically belongs to the surviving owner. However, if you hold the property as tenants in common, the deceased person’s share is distributed according to their will, which may not align with the other owner’s plans.
If one party wants to sell and the other does not agree, it can become a legal issue. In some cases, you may need to apply to the court for an order to force a sale, especially if there is no prior agreement in place.
This is why seeking legal support from a property settlement lawyer in Perth is essential. They can draft a co-ownership agreement that clearly outlines each person’s rights and obligations, helping to prevent future conflicts.
Final Thoughts
Joint property ownership in Perth offers a great way to enter the property market with a partner, family member, or investor. However, it’s not a one-size-fits-all solution. Whether you choose to hold the property as joint tenants or tenants in common, each option comes with different legal outcomes.
Before making a decision, speak to a qualified property settlement lawyer in Perth to ensure you choose the ownership structure that suits your long-term goals. It’s better to get the legal side sorted at the start than to deal with complications later.
