Should you own a property as joint tenants or tenants in common and what is the difference?

When two or more people buy a property together, one of the first legal decisions they need to make is how they will hold the ownership. Most buyers focus on the mortgage, the survey, and the price negotiation, and give little thought to the ownership structure until a solicitor asks them to choose between joint tenants and tenants in common. The choice between the two has real legal, financial, and inheritance consequences that are worth understanding before you decide.

Quick comparison of joint tenants and tenants in common

The table below sets out the key differences before each is explained in more detail.

What is joint tenancy?

Under a joint tenancy, both owners hold the property as a single, undivided whole. There are no defined shares. Each owner has an equal and identical interest in the entire property, which means neither can say "my half" in any legal sense.

The defining feature of joint tenancy is the right of survivorship. If one joint tenant dies, their interest in the property passes automatically to the surviving owner or owners, regardless of what the deceased's will says. The beneficial interest passes automatically to the surviving joint owner or owners rather than under the deceased's will, although administrative steps may still be needed to update the property records. This can make joint tenancy administratively simple for co-owners who want the surviving owner to inherit automatically.

The trade-off is inflexibility. Because there are no separate shares, a joint tenant cannot leave their interest in the property to anyone other than the surviving co-owner. If you want your share to pass to a child, a parent, or anyone else, joint tenancy does not allow for that.

What is tenants in common?

Tenants in common hold the property in defined, individual shares. Those shares can be equal (50/50) or unequal: 70/30, 60/40, or any other split the parties agree on. Each owner's share is their own to deal with as they choose, and tenants in common can have different shares based on what was contributed or agreed at the time of purchase.

The key difference from joint tenancy is that there is no right of survivorship. If a tenant in common dies, their share does not automatically pass to the other owner. Instead, it passes according to the terms of their will, or if they have no will, under the intestacy rules. This means a tenant in common can leave their share to anyone, including children from a previous relationship, other family members, or a trust.

Tenants in common is the more flexible structure and suits situations where:

• The owners are not married or in a civil partnership
• The owners contributed unequal deposits or purchase costs
• One or both owners want to leave their share to someone other than the co-owner
• The property is being purchased as an investment
• The owners want more flexibility over who inherits their individual shares

Joint tenancy mortgage and what it means for joint owners

Where all owners are also borrowers under a joint mortgage, they will usually be jointly and severally liable for the mortgage debt. This means the lender can generally look to either borrower for the full amount owed, rather than limiting liability to each person's beneficial share of the property.

For example, owning a 30% beneficial share does not usually limit a joint borrower's liability under the mortgage to 30% of the debt. Can you get a mortgage as tenants in common? Yes. Many lenders will lend where a property is held as tenants in common, although individual lender requirements can vary. Mortgage requirements vary between lenders, so your conveyancer should check the position with your chosen lender. If you are using a mortgage, it is also important that the conveyancer acting in the transaction can meet that lender's panel requirements.

Tax implications for joint property owners

Tenants in common and inheritance tax

The way a property is owned affects how an owner's interest passes on death, but it does not by itself determine whether Inheritance Tax is payable. With joint tenants, the deceased owner's interest passes automatically to the surviving joint owner or owners under the right of survivorship. Where the surviving owner is a spouse or civil partner, transfers may qualify for the spouse or civil partner exemption, subject to the relevant Inheritance Tax rules. Any unused nil-rate band may also be transferable to the surviving spouse or civil partner.

With tenants in common, each owner has a separate beneficial share that can pass under their will or, if there is no will, under the intestacy rules. This can provide more flexibility for estate planning because an owner can decide who should inherit their share rather than it passing automatically to the co-owner.

Whether either ownership structure results in an Inheritance Tax liability depends on the value of the estate, the relationship between the parties, the beneficiaries, any available exemptions or reliefs, and the wider estate-planning arrangements. Anyone considering ownership structure for tax-planning reasons should take appropriate legal or tax advice.

Tenants in common capital gains tax

For jointly owned property held as tenants in common, any Capital Gains Tax calculation is generally based on each owner's beneficial share. Whether CGT is actually payable depends on the circumstances, including any available reliefs, exemptions, allowable costs and the annual exempt amount.

Declaration of trust for tenants in common

If you are buying as tenants in common, particularly with unequal shares or where the deposit contributions differ, a declaration of trust is the document that formally records each owner's share and the agreed terms of the ownership.

A declaration of trust (also called a deed of trust) sets out what each party owns, what happens if the property is sold, how ongoing costs are split, and what happens if one party wants to sell before the other. It is not a legal requirement, but without one, disputes about the division of proceeds can become difficult and expensive to resolve.

If you contributed 70% of the deposit and your co-owner contributed 30%, a declaration of trust records those proportions and provides clear evidence of the beneficial shares the parties agreed. Without a clear declaration of trust, determining each person's beneficial interest can become more difficult and may depend on the ownership documents, the parties' intentions and other evidence.

The guide to what a declaration of trust does and when you need one covers what the document sets out and when your solicitor should recommend one.

How to change from joint tenants to tenants in common

Severance of joint tenancy

Changing from joint tenants to tenants in common after purchase is a straightforward legal process called severance of joint tenancy. It does not require the other owner's consent and can be done unilaterally.

A joint tenancy can be severed by serving a written notice of severance on the other joint owner or owners. This severs the beneficial joint tenancy so the owners hold as tenants in common. A Form A restriction can then be registered at HM Land Registry to reflect that the property is no longer held beneficially as a joint tenancy.

Where the owners want to record an agreed unequal beneficial split after severance, a declaration of trust can be used to formalise those proportions.

Severance is commonly done in the following situations:

• Before making a will that leaves your share to someone other than your co-owner
• As part of inheritance tax planning
• When a relationship changes and the owners want their shares clearly defined
• Before a cohabitation agreement is put in place

A solicitor, conveyancer or legal executive can help with the severance process, although it is also possible to apply directly to HM Land Registry yourself. The time and cost involved will depend on the circumstances and whether professional advice is required.

What happens to joint tenancy when you separate?

If a relationship breaks down and the property is held as joint tenants, either party can serve a notice of severance to convert the ownership to tenants in common. This is often the first step taken when separating owners need their shares defined before agreeing what happens to the property itself.

For anyone dealing with property ownership after a separation, the guide to what happens to the family home when a relationship ends covers both the sale and transfer of equity options in detail.

What happens to tenants in common property when one owner dies?

When a tenant in common dies, their share forms part of their estate and passes according to their will, or under the intestacy rules if no will exists. The surviving co-owner does not automatically receive the deceased's share.

If the deceased left their share to a child, the surviving co-owner may find themselves owning the property jointly with someone they did not choose.

Making a will that clearly addresses what should happen to a property share is particularly important for tenants in common. Unlike joint tenancy, the surviving co-owner does not automatically inherit the deceased owner's share, so a will can be particularly important where the owner has specific wishes for that share.

Which structure is right for you?

Joint tenancy may suit co-owners who want the surviving owner to inherit the property automatically. Tenants in common may suit owners who want defined shares or want their share to pass under a will. The right choice depends on your contributions, relationship, estate-planning wishes and wider circumstances.

Your solicitor or conveyancer will usually discuss the ownership structure with you as part of the conveyancing process. If they do not, it is worth asking before exchange rather than after.

Ready to get a conveyancing quote for a joint property purchase?

Find a solicitor who can advise on ownership structure and compare conveyancing quotes for joint purchases today. You can also see typical conveyancing fees when buying jointly and the disbursements that apply regardless of how you hold the property on the fee pages.

For location-specific fee estimates, the calculators for London, Manchester, and Leeds give a more detailed picture of typical costs in those markets.