Buying A Home: Joint Tenancy or Tenants in Common

Couple Looking at Their New House | One80Law Group

We know that when you’re buying a home, there’s so much to think about. You’ll be getting your finances arranged, planning your move, as well as thinking about things like insurance. When you’re buying a property with another person in Alberta or British Columbia, you’ll also need to decide how you will hold the title to that property – will you own it as joint tenants, or tenants in common? 

While this legal terminology refers to “tenants” which can be confusing as a new homeowner, it simply refers to the legal mechanism of how you’ll own the property together. We’ll discuss this in more detail in this post. 

You can choose between owning a property as: 

  1. Joint tenants
  2. Tenants in common

What is joint tenancy?

In this arrangement, the owners of the property in equal shares. This is a common method of ownership for couples. In the event that one of the joint tenants predeceases the other, their share in the property would automatically pass to the surviving joint tenant(s) in equal shares. 

What is tenants in common?

In this arrangement, there may be unequal ownership between the owners, for example a 25% to 75% split. 

In addition, if one of the owners were to predecease the other(s), their share would not automatically pass to the other person. Instead, it would be transferred according to their will. If the owner dies without a will (intestate) then their share would be transferred according to the Wills and Succession Act.

This method of ownership is more common in situations where the owners of the property are not in a relationship, for example when siblings buy a property together. They might have a spouse or children that they want the property to pass to if they died. 

An important thing to know about tenants in common ownership is that one owner is free to sell their share of the property without having to consult the other. While this would be unusual, it is a potential issue and something to be aware of. 

Should I buy as joint tenants or tenants in common?

There is no right or wrong answer to this question – it depends on your individual situation. You should speak to an expert real estate lawyer like One80 Law to get advice about your property-buying plans. Each ownership method has benefits and drawbacks, so we can discuss these with you. 

Are there tax implications?

Yes, there will be tax implications for whatever method of ownership you decide. As joint tenants, you will be equally responsible for any taxes on the property. 

As tenants in common, you will also be responsible for any taxes on the property. In most jurisdictions, the tenants in common will receive a single property tax bill which will have to be sorted between the parties. Each of the independent owners may be liable for up to the full assessment amount. 

What else do I need to be aware of?

By owning property as joint tenants, you would avoid a need for probate in the event one of the owners died and the house was their only asset. 

As tenants in common, if one tenant dies, that person’s share of the property becomes part of the deceased’s estate. It is subject to probate fees and will be distributed to the beneficiaries of their estate. 

Our experienced lawyers at One80 Law Group are happy to assist you in any real estate transaction or probate questions you may have. 

What if we change our minds? 

You are able to change the method of ownership from joint tenancy to tenants in common, or the other way around. To do this, speak to One80 Law to arrange the paperwork and change of title, as well as discuss any implications you might not have considered.