In England and Wales, when you buy a home with a second person you need to let the Land Registry know how you would like to own it. There are two common ways in which you can own the property – as ‘joint tenants’ or ‘tenants-in-common’ – and you should choose the way that is most appropriate for your situation.
To help you decide we have listed the key points on each below.
If you choose to own the property as joint tenants it means that:
- you own the property in 50/50 shares and if one of you dies the other will automatically inherit their share of the property, regardless of what your will might say
- if you sell the property then you both need to agree to the sale and you will split the proceeds 50/50 between you
- if you own the property with your partner and you die then the property will automatically pass to your partner even if you have children and a will.
If you choose to own the property as tenants-in-common it means that:
- you each own a 50/50 share in the property, but if one of you dies your will is used to see who will inherit your share (or your nearest living relatives under the rules of intestacy)
- it is possible to own unequal shares if one of you paid more towards the deposit or the mortgage
- you can leave your share to anyone that you choose in your will
- you can sell or give away your share
- if you need to move into a care home at a later date, you will only be means tested on your share of the property.
You can sever your joint tenancy and become tenants-in-common using a simple form that you can download from the Land Registry called a Notice of Severance, provided both of the joint owners agree to it.
What about the rest of the UK?
The options are similar for other parts of the UK. The position in Northern Ireland is almost identical to that in England and Wales, except there is no ‘notice of severance’ – this has to be done by deed or a unilateral charge by one co-owner. In addition, in Northern Ireland there is both a Land Registry and a Registry of Deeds, rather than just a Land Registry – see www.nidirect.gov.uk
The options in Scotland are similar to England and Wales, but the terminology is different. When you buy property with someone else, you can choose to include a ‘survivorship destination’ in the title, which has the same effect as a joint tenancy. If you do not include the destination, that is effectively the same as holding as tenants-in-common. One thing to watch, however, is that if you have a survivorship destination and then want to cancel it, the process is more complicated than in England and Wales and cannot be done unilaterally.