When you buy a property with another person, you must decide how you will legally own it together, and that choice matters more than most buyers realise.
Why ownership structure matters
Buying a home is one of the biggest financial decisions most of us will ever make. When two or more people buy together, there is an important legal question to answer before completion: how will you hold the property between you? The two options are joint tenants and tenants in common. Both are perfectly lawful and widely used, but they work in very different ways and can have significant consequences for inheritance, tax planning and what happens if the relationship between owners breaks down.
Getting this decision right at the outset is far easier than trying to change things later, so it is well worth taking a few minutes to understand what each option means in practice.
What does joint tenants mean?
As joint tenants, you and your co-owner together hold the property as a single, indivisible unit. Neither of you owns a specific share; instead, you each own the whole property alongside the other person.
The defining feature of joint tenancy is the right of survivorship. This means that if one owner dies, their interest in the property passes automatically to the surviving owner, regardless of what the deceased person's will says or what the rules of intestacy would otherwise provide. The property does not form part of the deceased person's estate for the purpose of passing on their assets, so it cannot be left to children, other relatives or anyone else through a will. The deceased owner's share is still counted for inheritance tax, even though it passes outside the will.
Joint tenancy is often the straightforward choice for married couples or civil partners who want to ensure the surviving partner inherits the home without complication. It is simple to arrange and requires no extra documentation to record separate shares.
What does tenants in common mean?
As tenants in common, each owner holds a distinct, defined share of the property. Those shares can be equal, for example fifty per cent each, or unequal, such as sixty and forty per cent, to reflect different financial contributions or any other arrangement the owners agree upon.
Crucially, there is no right of survivorship. When one owner dies, their share does not automatically pass to the surviving owner. Instead, it forms part of the deceased person's estate and passes according to their will, or under the rules of intestacy if they have not made a will.
This flexibility makes tenants in common a popular choice in a range of situations, including:
- Unmarried couples who want to protect their individual contributions to the purchase price
- Friends or relatives buying an investment property together
- Couples in second relationships who have children from previous relationships and want to ensure their share passes to those children
- Buyers with significantly different deposits or mortgage contributions who want ownership to reflect that
- People using a trust or estate planning strategy to manage inheritance tax
When you hold as tenants in common, it is strongly advisable to put a declaration of trust in place. This is a legal document that records each person's share and can also set out what happens if one owner wants to sell, how running costs are split, and other practical arrangements. Without one, disputes can be costly and stressful to resolve.
How do you choose between the two?
There is no single right answer, and the best choice depends on your personal circumstances, your relationship with your co-owner, your financial arrangements and your wider estate planning wishes. The questions below can help you think it through.
Are you married or in a civil partnership?
Many married couples opt for joint tenancy because they want the survivor to inherit the home automatically and simply. That said, some married couples, particularly those with children from earlier relationships or significant individually owned assets, prefer tenants in common so they can control what happens to their share through their will.
Did you contribute different amounts to the purchase?
If one person is putting in a larger deposit or paying a greater share of the mortgage, tenants in common with an unequal split may be fairer. It means that if the property is sold, each person receives the share of the proceeds you agreed and recorded, which can reflect what each of you put in.
Do you have children from a previous relationship?
If you want to protect your children's inheritance, holding as tenants in common and making a will that leaves your share to them is a common and sensible approach. As a joint tenant, you cannot do this, because the right of survivorship overrides your will on this point.
Are you buying with friends, siblings or as an investment?
Where the relationship is not a romantic one, tenants in common almost always makes more sense. It gives each person a clearly defined stake that they can leave in their will or deal with separately, and avoids one person inheriting the other's interest by accident.
Is estate planning or inheritance tax a consideration?
Some couples use tenants in common as part of a broader estate planning arrangement, sometimes alongside a will trust. If inheritance tax is a concern, we can explain how ownership fits into the wider picture.
Can you change from one to the other later?
Yes, it is possible to change your ownership structure after you have bought the property. Switching from joint tenancy to tenants in common is called severing the joint tenancy. This can be done by one owner serving a written notice on the other and updating the register at HM Land Registry. It does not require the other person's consent, though it is obviously better to discuss it openly.
Going the other way, from tenants in common to joint tenants, requires the agreement of all owners and also involves updating the Land Registry title.
Both changes are relatively straightforward in legal terms, but they should not be undertaken without thought. If you are severing a joint tenancy, you should also update your will at the same time, because your share will now form part of your estate on death. We can handle both steps together so nothing falls through the cracks.
How we work with you
Deciding how to hold a property is not just a form-filling exercise; it is a decision that can affect your family for years to come. Our conveyancing team will talk you through both options at the outset of your transaction, explain what each one means in your particular situation, and make sure the right structure is recorded correctly with HM Land Registry from day one.
If tenants in common is the right route for you, we can also draft a declaration of trust that reflects your actual agreement, so there is no ambiguity about shares, costs or what happens if circumstances change.
Many clients also find it useful to review their wills at the same time as buying a property, particularly if they are choosing tenants in common. We work closely with our wills and probate team, so we can coordinate both pieces of work smoothly if that would help.
If you have questions about any of this, please do get in touch. We are happy to have a no-pressure conversation and point you in the right direction, whatever stage you are at.
Call our Hull office on 01482 228808, or use the enquiry form on this page.