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.
Marc has been a professional lender for 28 years. After beginning his career in 1990 with a UK Building Society, he moved to Australia where he held several different retail banking roles. In 1999 it became clear to him that a mortgage broker would eventually become an obvious choice for someone looking for a home loan so he took the plunge and became an independent broker. He hasn’t looked back since!