Names on Property Title

If you purchase a house or apartment by yourself, arranging
the title is pretty simple: unless you’re a company, the property title will
typically be registered in your name alone. Too easy.

If you’re purchasing with another person – usually your spouse or long-term partner, but possibly with a group of friends or your parents – there are a few different options for whose name to put on the title.

Keep in mind that there are complicated property ownership
and taxation laws that might affect your decision, so make sure you talk to us
and also consult a lawyer and financial advisor before putting your name (or
someone else’s) on the dotted line.

Joint tenants

The most common form of joint ownership for couples in
Australia is called joint tenancy. In this type of title, both people share
complete ownership of the house or apartment as a single entity. Because both
people own it all, one person cannot sell or give away their ‘share’.

If the couple separates, it gets a little bit complicated
and involves first agreeing on a financial settlement. With that done, it’s a
relatively simple process to change the title; we can help with the paperwork
if this situation arises.

With joint tenancy, if one person dies, full ownership
automatically goes to the surviving partner.

Tenancy in common

If two or more people purchase a property, tenancy in common
is a standard ownership structure. With tenants in common, people own a share
of the property. The shares don’t have to be equal. This can often occur when a
family home is left to a number of children.

When one of the owners dies, their share is passed on to
their heirs, which may include more than one person. It gets complicated fast. One
common result of this structure is that when one owner dies, the property needs
to be sold, as the beneficiary or beneficiaries have no interest in
co-ownership.

When purchasing with a group, this can be a handy way for
people with different amounts of money to buy in on a purchase. Understanding
the implications if one partner needs to sell is vital. It’s also important to
know that although each partner can have their own loan to cover the purchase
price, the tenants in common are all jointly responsible for covering repayments.
If one partner can’t make the repayments, the others are responsible.

Worst case scenario: a lender can insist that the property
is sold if they’re owed money.

Going solo

It might be because of tax or a business set-up, but
sometimes it makes sense to just put one name on the title, even when a couple
is purchasing a house, flat or apartment.

Sole operators running their own business might choose to
put a property in their partner’s name only. If things turn sour and there’s a
law suit or bankruptcy, the home is protected as it’s not an asset of the
business operator.

If you’re buying an investment property, you need to pay
capital gains tax if you sell for more than you paid. If one partner has a low
income (or no income), it might make sense to put that person’s name on the
title. The gain will probably be taxed at a lower rate; this might save
thousands of dollars.

If the relationship ends, the person not on the title is
still protected. Just because you’re not on the title doesn’t mean you’re not
recognised as having an interest in the property.

Talk to us

Make sure you get advice that takes your financial and
relationship circumstances into account before purchasing a property. At
Mortgage Broker Melbourne, we’re happy to run through your options and explain
the implications of different choices. Contact us today.