Joint Tenants vs Tenants in Common: What Every Australian Co-Owner Needs to Know

What is joint tenancy?🔗

Joint tenancy means you and your co-owner hold the property together as a single, unified ownership unit. You each own 100% of the whole, not a slice of it. Legally you cannot hold unequal shares as joint tenants: it's always equal, regardless of who put in more money.

The defining feature is the right of survivorship. If one joint tenant dies, their interest automatically passes to the surviving owner (or owners, if there are more than two). It happens by operation of law, not through the deceased's will. For a couple who want things to stay simple, that automatic transfer can be genuinely useful: the property doesn't get tangled up in the estate, it just moves across.

The catch: because shares must be equal, joint tenancy doesn't suit situations where one person contributed more, or where co-owners want to protect their individual interests independently.

What is tenants in common?🔗

Tenants in common means each co-owner holds a distinct, separate share of the property. Those shares can be equal (50/50) or unequal (say 70/30 or 60/40). Each owner's share is their own asset.

There is no right of survivorship. When one owner dies, their share does not automatically go to the other owner. Instead, it forms part of their estate and passes according to their will. If they die without a will, it goes through the intestacy rules of their state. This structure gives each co-owner much more control: you can leave your share to whoever you like, or use it as security for a loan. For investors, friends buying together, or family pooling resources, tenants in common is usually the more flexible fit.

What happens when one owner dies?🔗

This is where the two structures diverge most sharply.

Joint tenancy: the surviving owner automatically becomes the sole owner. The deceased's interest never enters their estate. To update the title, the survivor lodges a survivorship application at the relevant state land titles office (for example NSW Land Registry Services, Land Use Victoria, Titles Queensland, or Landgate in WA). It's a relatively straightforward administrative step.

Tenants in common: the deceased's share passes to their estate and the executor administers it according to the will. If the deceased wanted their share to go to their partner, they need to have said so explicitly in a valid will. So if you're tenants in common and you want your co-owner to inherit your share, make sure you have a current valid will that says so. Don't assume it happens automatically. It won't. This is exactly the kind of detail a proper estate plan is built to catch.

Unequal ownership shares🔗

Only tenants in common can hold unequal shares, and it's one of the main reasons investors and friends choose it. Say you and a friend buy an investment property together: you contribute $120,000 to the deposit and they contribute $80,000. As tenants in common you can register a 60/40 split on the title that reflects your actual contributions. As joint tenants you'd each be stuck at 50/50 regardless of who paid what.

Unequal shares also matter for tax. The ATO splits rental income and capital gains according to each owner's registered percentage. If you're in a higher tax bracket than your co-owner, holding a smaller share can reduce your overall tax bill, which ties into how investment property deductions and negative gearing are shared between owners. A separate co-ownership agreement (covering how costs are split and what happens if one owner wants out) isn't legally required, but it's a very good idea.

Stamp duty and CGT: the Australian tax picture🔗

Let's get the big one out of the way: Australia has no federal inheritance tax. There's no death duty on property passing from one owner to another on death, whether you're joint tenants or tenants in common. (We go deeper on this in is there inheritance tax in Australia.)

Capital gains tax is a different story. When a co-owned property is sold, each owner pays CGT on their share of the gain: split equally for joint tenants, and by registered percentage for tenants in common. Hold for more than 12 months and you get the 50% CGT discount on your share, under both structures. The main residence exemption can also apply per owner, based on their share.

How it interacts with your will and estate planning🔗

Joint tenancy and your will operate in completely separate lanes. If you hold as joint tenants, the right of survivorship overrides your will for that property. You could write a will leaving your half of the house to your children from a previous relationship, but if you die first, the property passes automatically to your co-owner and your will has no effect on it. That's a critical point for people in blended families or second marriages.

If you hold as tenants in common, your share is part of your estate and your will controls what happens to it. There's also an asset-protection angle: a joint tenant's interest is harder for creditors to reach, while a tenant in common's defined share is a distinct asset creditors can potentially access. For blended families, tenants in common is almost always the more appropriate structure: it lets each partner protect their share for their own children.

How to change from one to the other🔗

Switching structures is possible, and it happens more often than you'd think. The most common change is from joint tenancy to tenants in common, often triggered by a relationship breakdown or estate planning advice. The process is called severance of joint tenancy, and in most states one joint tenant can sever unilaterally, without the other owner's consent, by lodging the right form with the state land titles office.

In practice the steps look like this:

1. Get legal advice; a solicitor prepares the transfer documents.
2. Lodge the transfer (for example a Transfer Altering Tenancy in NSW, or a Change in Manner of Holding in Victoria).
3. Check stamp duty: equal-share changes are generally exempt, unequal-share changes may not be.
4. Update your will, because your share is now part of your estate.

The whole process can usually be completed in a few weeks, depending on your state and whether the change is contested.

Which structure suits which situation?🔗

There's no universally right answer, but here's a practical guide.

One more thing: you can start as joint tenants and switch later, so you're not locked in forever. But switching has legal and potentially tax consequences, so it's better to get it right at the start. Think about three things: what you want to happen if one of you dies, whether your contributions are equal, and whether you have estate planning considerations like children from a previous relationship. If you're unsure, talk to a solicitor before settlement, not after.

❓ Frequently asked questions🔗