Buying a new home with your partner is an exciting time, and with so much to think about it’s easy to overlook some of the important differences in how you legally own the property, but it’s important to understand your options and arrange the necessary paperwork before you complete your purchase.
There are two ways to own a property with your partner:
- Joint tenants
- Tenants in common
If you don’t enter into any specific agreement at the time of purchase the assumption is that you are joint tenants. As joint tenants you own the property in equal shares both in the legal title (you both have your name on the title deed) and in the beneficial title (you both own 50% of the equity). In addition if one of you were to die, the surviving partner automatically receives the remaining 50% of the property.
If you don’t own the property equally – or you don’t want your partner to automatically receive the remaining equity on your death, then you need to enter into a declaration that you own the property as tenants in common. Under this ownership structure you are both on the title deeds, but you are able to vary the amount of equity that one partner owns. For example, 60% to you, 40% to your partner – or 70% to your partner, 30% to you. The other important difference is that you make provisions in your will as to who will receive your share of the equity if you were to die – and your share will not automatically pass to your partner.
In addition to these two legal ownership structures you may find that you have an interest in a property despite not being on the title deeds. You can find more information about this in my other posts