Joint tenants or tenants in common: buying land with someone else

The WA land contract asks a question that many buyers haven’t thought much about: how will you hold the property? There are three boxes to choose from: sole owner, joint tenants or tenants in common. The choice affects what happens to the land if one owner dies, how shares are divided and sometimes how you deal with tax.

This guide is a plain-English overview, not legal advice. It’s a decision worth talking through with a solicitor or accountant before you sign.

Sole owner

The simplest option. One person owns the land outright. They make all the decisions and are responsible for all the costs. When they die, the land passes under their will.

Sole ownership suits single buyers, or couples where it makes sense for one person to hold the property for financial, tax or estate planning reasons.

Joint tenants

With joint tenancy, two or more people own the whole property together. No one owns a particular share. Instead, each owner owns all of it, jointly.

The defining feature is the right of survivorship. If one joint tenant dies, their interest automatically passes to the surviving joint tenant or tenants. It doesn’t pass under their will.

Joint tenancy is commonly used by couples who want the surviving partner to own the property outright.

Tenants in common

With tenants in common, each owner holds a defined share of the property, such as 50/50, 60/40 or thirds. Shares don’t have to be equal. They’re often set to reflect how much each person contributed.

If a tenant in common dies, their share passes under their will, not automatically to the other owners. Each owner can also sell or transfer their own share, subject to any agreement between the owners.

Tenants in common often suits:

• Friends buying together
• Siblings or extended family
• Parents buying with adult children
• Couples with children from earlier relationships, who want their share to go to their own children
• Business partners

Buying through a company, trust or SMSF

Some buyers purchase through a company, family trust or self-managed super fund. These structures have their own legal, tax and compliance considerations. Buying land in an SMSF in particular has strict rules. Read buying vacant land in an SMSF and speak to an adviser first.

What to agree on before you buy together

Whichever structure you choose, if more than one person is buying, have the hard conversations now.

Money

• Who’s paying the $10,000 deposit?
• Who’s paying the balance at settlement, and how much each?
• How will you split ongoing costs like council rates, water charges and maintenance?

Plans

• What will the land be used for, and when?
• Who will build, what will they build, and how will it be funded?
• If one person builds a home, how does that affect the other owners?

Exit

• What happens if one owner wants to sell?
• Does the other owner get first option to buy them out?
• What happens if someone can’t pay their share of costs?
• What happens in the event of a relationship breakdown?

Putting your agreement in writing, ideally prepared with legal advice, saves a lot of heartache later.

Worked examples

Here are some common buying situations and how people often approach them. These are general illustrations only.

A married couple buying together

Many couples choose joint tenants, so that if one dies, the other automatically owns the whole lot. It’s simple and reflects shared finances.

Two friends splitting it 50/50

Friends often choose tenants in common in equal shares, each with their own will setting out who inherits their half. They usually also have a written agreement covering costs and what happens if one wants to sell.

Parents and an adult child

If parents contribute more and the child contributes less, tenants in common with unequal shares can reflect each person’s contribution, such as 70/30.

A blended family

A couple who each have children from earlier relationships might choose tenants in common, so each partner’s share can be left to their own children.

Siblings buying a holiday base

Siblings often use tenants in common, plus a co-ownership agreement covering who uses the land when, how costs are split and how anyone can exit.

Co-ownership agreements

A co-ownership agreement is a private contract between the owners. It isn’t part of the purchase contract, but it sits alongside it. It typically covers:

• Each owner’s share
• How costs are split
• Who can use the land and when
• Decisions about building
• What happens if someone wants out
• How disputes are resolved

A solicitor can prepare one. For family and friends buying together, it’s one of the best investments you can make.

Estate planning

How you hold property interacts with your will. Joint tenancy bypasses the will for that property, while a tenancy in common share is dealt with by the will. If you’re updating your will, tell your solicitor how you own your land.

Finance and co-ownership

If you’re borrowing, lenders usually require every owner on the title to be part of the loan or guarantee it. Each person’s income, debts and credit history may be assessed. Talk to a lender or broker early so there are no surprises.

Tax considerations

Ownership structure can affect how income, deductions and capital gains are treated for each owner. Everyone’s situation is different, which is why an accountant’s advice is worth getting before you sign.

Changing your mind later

It’s sometimes possible to change from joint tenants to tenants in common, or to transfer a share. But it can involve legal fees and possibly duty, so it’s far easier to choose carefully at the start.

Thinking about the future

Ownership decisions are usually made on a happy day, when everyone is excited about the purchase. But they matter most in harder moments: illness, death, separation or disagreement. Thinking those through now is an act of care for everyone involved.

If a co-owner dies

• Joint tenants: the land passes to the surviving owner(s), usually through a simple process.
• Tenants in common: the deceased owner’s share passes under their will. Their executor deals with it, and the surviving owners may end up co-owning with someone new, such as the deceased owner’s children.

If a couple separates

How property is divided depends on family law, not just the ownership structure. But the structure affects how the title needs to be dealt with. Get legal advice.

If a co-owner can’t pay their share

Without an agreement, this can become a dispute. A co-ownership agreement can set out what happens, for example that the other owners can cover costs and recover them later.

If someone wants to sell

A co-ownership agreement can give the other owners first right to buy the departing owner’s share at a fair value.

Questions to discuss as a group

1. What are we each contributing?
2. How will ongoing costs be split?
3. Who decides what gets built?
4. How will we handle using the land?
5. What happens if one of us wants out?
6. What happens if one of us dies?
7. How will we resolve disagreements?

Getting it on paper

Even close family and friends benefit from a written agreement. It isn’t about mistrust. It’s about making sure everyone understands the plan and that there’s a fair process if circumstances change.

A quick comparison

	Joint tenants	Tenants in common
Shares	Equal, undivided	Defined, can be unequal
On death	Passes to survivors	Passes under the will
Selling a share	More complex	Each owner can deal with their share
Commonly used by	Couples	Friends, family groups, blended families

This is a simplified summary. Your solicitor can explain how each applies to your situation.

Common questions

Can friends buy a lot together?

Yes. Tenants in common is often used so each person’s share is clearly set out, and each share passes under that person’s will.

Where do I choose the ownership type?

On the contract, which has boxes for sole owner, joint tenants and tenants in common. If you choose tenants in common, the shares are specified.

Can shares be unequal?

Yes, with tenants in common. Shares like 60/40 or 70/30 are common when owners contribute different amounts.

Can we change the ownership structure later?

It may be possible to change how property is held after purchase, but it can involve legal costs and possibly duty. It’s much simpler to get it right at the start.

What does right of survivorship mean?

It’s the feature of joint tenancy where, if one owner dies, their interest automatically passes to the surviving owner or owners rather than under their will.

Do all the buyers need to sign?

Yes. Every buyer named on the contract needs to sign it.

Do we all need to be on the loan?

That depends on your lender’s requirements and your structure. Talk to your lender or broker before you sign.

Is one option better for tax?

It depends on your circumstances. Ownership structure can affect tax and estate planning, which is why an accountant’s advice is worthwhile.

Can a company buy a lot?

Yes, companies and trusts can buy property. There are specific requirements for signing and tax, so get professional advice first.

What happens if co-owners disagree about selling?

A co-ownership agreement can set out how disagreements are handled. Without one, it can be complicated, so get legal advice.

Can I leave my share to my children?

With tenants in common, your share passes under your will. With joint tenants, it passes to the surviving owner.

Do co-owners need the same lender?

Usually all owners on the title are involved in the loan. Talk to a lender about your situation.

Do we need a co-ownership agreement?

It isn’t required, but it’s strongly recommended when friends or family buy together.

How much does a co-ownership agreement cost?

Costs vary by solicitor and complexity. Ask for a quote.

Can there be more than two joint tenants?

Yes. Two or more people can own as joint tenants.