When two or more people purchase property, one key consideration is how they choose to own that property.
During the purchase we will ask if the property will be jointly owned as there are two options of joint ownership which need to be considered:
- Beneficial Joint Tenants; and
- Tenants in Common.
Choosing the most suitable option based on your personal circumstances is crucial as it will determine how the property can be dealt with on the death, divorce or separation of the parties.
Beneficial joint tenants
This is the most common form of joint ownership.
Beneficial Joint Tenants own the property in equal shares. If one of the joint owners dies, their share in the property will automatically transfer to the surviving co-owner(s). On the death of the last to die, the property will pass on to the beneficiaries named in their Will or, if there is no Will, to their next of kin according to the Intestacy Rules.
This type of co-ownership is suitable for married couples who are putting in equal amounts of equity to the property. If the owners of the property are not paying equal amounts (either by way of a deposit or mortgage payments), on the sale, they will not be able to force the other co-owner(s) to split the proceeds of sale to take account of these payments.
Tenants in common
As Tenants in Common, co-owners possess the property in unequal shares. This type of co-ownership is suitable if unequal amounts have been paid to purchase the property, or if the outgoings (such as the mortgage) are unequal amounts. This type of co-ownership is suitable for unmarried couples and business partners.
If you are contributing unequal amounts to the property, we would suggest that a Declaration of Trust is also entered into. A Declaration of Trust covers what happens to the property if:
- You separate;
- One cannot pay their share of the Mortgage; or
- If one wants to sell and the other does not.
The Declaration of Trust needs to be kept and recorded legally against the title of the property.
On the death of a co-owner their share does not automatically pass to the surviving owner(s), instead it will go to the person named as the beneficiary in the deceased person’s Will, or to their next of kin under the Intestacy Rules.
When buying and selling a property, you should always considering either making or updating your Will to reflect this change in circumstances, especially if you hold a property as Tenants in Common. Our Wills, Trusts & Probate Team would be more than happy to help with any queries you may have.
Pricing and timescales
To provide you with the accurate and relevant pricing information to help you make a considered decision when choosing and purchasing legal services from our Residential Conveyancing team please visit our Legal fees for Residential Conveyancing page or contact us.
Stamp Duty Land Tax
The Stamp Duty Land Tax (SDLT) holiday for residential property purchases up to £250,000 and nil rate threshold for first time buyers relief for property purchases up to £425,000 will end on 31 March 2025. From April, standard SDLT rates will apply to all residential purchases. We recommend that all clients, purchasing residential property in England and Wales, budget for paying SDLT in the event that a purchase does not complete on or before 31 March 2025. There are many reasons why transactions may be unable to complete before these dates and we cannot accept responsibility for any SDLT due in respect of your property purchase, where the purchase completes after these dates.
Advice on protecting yourself against online fraud
Online fraud is on the increase specifically in property transactions. To help keep yourself safe from this threat please view our advice on protecting yourself.
Please note that our last day for completions prior to the Christmas break will be Friday 20 December 2024.
