Purchasing a Property | Types of Property Ownership NSW
You should consider how your property ownership will be registered if you are purchasing a property with another person or entity.
The type of property ownership you chose to proceed with can impact each individual or entity in several ways.
Below we have listed and explained the different types of property ownership:
A Sole Proprietor exclusively owns the property. A Sole Proprietor is the only person registered on the certificate of title. They are responsible for all of the liabilities arising from the property. They also receive any profits derived from the property.
Joint Tenancy is only an option if there are two or more parties purchasing a property.
Purchasing a property as Joint Tenants allows the interest of one owner, once they are deceased, to be transferred to the surviving owners. This means that Joint Tenants have a right of survivorship.
A valid Will is not required to pass on the interest of the deceased owner to the surviving owners. The interest will be passed on merely because of the property ownership being as joint tenants.
The surviving owners will need to visit a lawyer to determine what is required to pass the interest to them however the process is very simple.
Tenants in Common
Purchasing a property as Tenants in Common is only an option if there are two or more parties purchasing the property.
Each purchaser has to specify their interest in the property if they decide to purchase as Tenants in Common. The shares of each party may be equal or unequal.
For example, John and Larry are Tenants in Common in equal shares (50/50) OR John and Larry are Tenants in Common in unequal shares (70/30).
Tenants in Common do not possess a right of survivorship. Each Tenant in Common is entitled to leave his or her share of the property to any person specified in their Will (so long as the Will is valid). A deceased persons share will not be passed on to the surviving owners unless this is specified in their Will.
Things to Consider
We always recommend having your Will prepared when you purchase a property. This is especially important if you own property with a person or entity as Tenants in Common. By having a Will prepared, you will be able to attain peace of mind knowing that your property will be dealt with in accordance with your wishes.
We also recommend obtaining financial advice to determine how your type of ownership will influence your financial status, tax implications, etc. You should speak to an industry professional in this regard.
Please contact our office if you require any assistance.