There’s no doubt about it - buying a property with your partner can be exciting. But it’s important to take your time so you understand your rights and responsibilities.
These days, it’s common for couples to purchase property together before they get married, and the law can be different for unmarried couples. There are two ways you can own your home: joint tenancy or a tenancy in common.
Joint tenancy is the most common arrangement for couples. This is where the house is owned equally by both parties. It doesn’t matter if you paid more for the deposit or the mortgage, your share in the house will be equal.
A joint tenancy has no ‘severable share’, which means if one partner dies, the surviving partner automatically receives ownership of the whole property, and therefore full responsibility for the outstanding debt. This also means from an estate planning perspective you can’t leave your share in a jointly-owned property to your beneficiaries in your will.
Your mortgage under joint tenancy is typically a shared responsibility - what the banks call ‘joint and several liabilities between all parties’. This means if one person defaults, then the other will need to make the repayments.
Tenants in common
Under a tenants in common arrangement, each party owns a separate and distinct individual share in the property. This could be 50-50 or any other proportion you agree to. Unlike joint tenancy, if your partner dies, their share doesn’t automatically default to you, and it will be managed or shared according to the wishes of the person in their will. This also applies if you separate.
Let’s say John and Mary purchase a house as tenants in common. John owns a 60% share and Mary owns a 40% share. This is their second marriage and they both have children from a first marriage. This type of ownership works well for them because it means they can nominate their children to be beneficiaries for their share of the house in their will. This type of ownership works well for John and Mary but may not be suitable for everyone. It’s important to look at your individual situation and assess what will work best for you.