Buying property with a partner in Australia: joint tenants vs tenants in common

Title structure is the box almost every couple ticks without reading. Two letters on the contract, JT or TIC, decide who inherits a half-million-dollar asset if one of you dies on the weekend, and whether a 70/30 deposit split is honoured or quietly rounded back to 50/50 at sale. The conveyancer will not push you on this. Burbfinder thinks you should push yourself.

Joint tenants: equal shares, automatic survivorship

Joint tenancy means two (or more) people own the whole property together in equal undivided shares. There is no "your half" and "my half"; there is one shared title with both names on it. Two consequences flow from that.

First, the right of survivorship. If one joint tenant dies, their interest passes automatically to the surviving joint tenant, outside the will and outside the estate. No probate delay, no contest from a child of a prior marriage, no surprise. This is why joint tenancy is the default for married couples and de facto partners with shared finances and a shared family. Second, neither owner can sell or mortgage their interest independently. Any dealing with the title needs both signatures.

Tenants in common: defined shares, no survivorship

Tenants in common is the structure where each owner holds a defined percentage of the property: 50/50, 70/30, 99/1, whatever the title deed records. Each share is its own piece of property. It can be willed, sold, or mortgaged independently of the other owner's share, subject to the co-owner's rights of first refusal and any co-ownership agreement.

There is no automatic survivorship. If a tenant in common dies, their share passes per their will, or per the intestacy rules if there is no will. That is the structure's strength and its risk depending on circumstance.

Tenants in common is usually the right call when:

• One partner contributes substantially more deposit and the split should reflect it.
• Blended families want each partner's share to pass to their own children rather than to the surviving spouse.
• Friends or siblings buy together with no expectation of one inheriting from the other.
• Investment partners hold property inside a defined business arrangement.
• Asset-protection or estate-planning advice has been taken and a specific split was recommended.

Worked example: 80/20 tenants in common on a Sydney apartment

A couple buys a $900,000 apartment in inner Sydney. Partner A contributes a $200,000 deposit from a previous property sale. Partner B contributes $50,000 from savings. The bank lends $650,000 jointly. They register as tenants in common 80/20 to reflect the deposit split.

Ten years later they sell for $1,300,000 and, through a mix of scheduled repayments and an offset balance, the loan is fully cleared at settlement. After agent commission, marketing, and conveyancing of $30,000, net proceeds are $1,270,000. The equity is divided 80/20 per the title: Partner A receives roughly $1,016,000, Partner B roughly $254,000.

Had they registered as joint tenants instead, the proceeds would have been split 50/50 by default on dissolution: about $635,000 each. The $381,000 difference is the spread between "equal" and "proportional". The title structure is what protects it. A handshake agreement that Partner A "put more in" carries no weight against an equal-share title at the property registry.

The lending trap most couples miss

Title structure and loan structure are different documents. Almost every lender treats joint applicants as jointly and severally liable for the entire mortgage, regardless of whether the title says 80/20 or 99/1. If your partner stops paying, the bank does not chase them for 80% and you for 20%. The bank chases whoever is easier to collect from for the full balance.

That has two practical implications. A 99/1 split does not protect the 1% owner from the loan; the bank can still come after them for the lot. And if the relationship breaks down and one partner walks away, the remaining partner is on the hook for the whole repayment until a refinance or sale clears the loan. Run the repayment through the mortgage calculator on a single income before you sign anything; if the answer is "no" on one salary, the structure has a fragility you should price in.

Stamp duty, CGT, death and divorce

Stamp duty is calculated on the full property price once, not on each share separately. A 70/30 split does not save duty. Some states offer concessions on transfers between spouses or de facto partners after a property settlement; those are separate from the purchase. First home buyer concessions are state-specific and depend on whether both buyers qualify; the first home buyer guide sets out which states cut the cheque and which cap the price.

CGT applies to each owner on their share of the gain at sale. The main residence exemption is assessed per owner. If one partner moves out and the property is rented for a period, partial CGT can apply to that owner's share when sold; the other owner's share may stay fully exempt if the property remained their main residence. The CGT worked example walks through how the cost base, discount, and marginal rate interact on a single share.

Death and divorce hit the two structures differently. Joint tenancy means the survivor inherits automatically and the will is irrelevant for the property. Tenants in common means the share passes per the will, which can be a feature (blended families) or a problem (no will, intestacy, contested estate). On divorce, the Family Court applies family-law principles to property settlement and can override the title regardless of how the share is registered. Title structure protects you against death and accidents of finance; it does not override family law.

Changing the structure later

Joint tenancy can be severed unilaterally. One owner files a notice of severance with the relevant state Land Registry, pays a small fee (typically $100 to $200), and the title converts to tenants in common in equal shares. If the desired split is not 50/50, a transfer between owners is required and stamp duty may apply on the moved share, although several states offer concessions where the transfer is between spouses or as part of a property settlement. Take advice before lodging.

The cleanest moment to get this right is at purchase. Tell the conveyancer the split you want, in writing, before contracts are signed. If you later want to change it, you can. The paperwork is not glamorous but the cost is small compared with what the wrong default at purchase can quietly take from one of you a decade later.