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Below is Chapter 2 of our ‘Buying Property in NSW’ booklet. To read the other chapters of our booklet, click the links below:
- Chapter 1 – Introduction
- Chapter 3 – Sale types
- Chapter 4 – Due diligence
- Chapter 5 – Negotiations
- Chapter 6 – Exchange
- Chapter 7 – Settlement
In Australia, there are various ways to own property, each with its own legal implications. Understanding these forms of ownership is crucial when purchasing property:
- Sole Proprietor: The property is owned by one person. This is straightforward but means the sole owner bears full responsibility for the property.
- Joint Tenants: In this form of ownership, each co-owner has joint rights to the property. If one owner dies, their share automatically passes to the surviving co-owner(s) through the right of survivorship. This is common among couples without blended families.
- Tenants in Common: Each co-owner owns a specific proportion of the property, which may be equal or unequal. Unlike joint tenancy, there is no right of survivorship. Each owner’s share can be sold, transferred, or bequeathed independently. This arrangement is suitable for extended relatives, business partners or individuals contributing different amounts towards the purchase.
You might also consider purchasing a property in an entity or structure, such as a company or trust, for tax, asset protection or other reasons. You should obtain advice to ensure the proposed ownership is suitable for your objectives, and that the entity/structure documents are in order.
It can be difficult and costly to change the ownership of a property down the track. As such, it is important to give this aspect proper attention from the outset.
The information contained in this post is current at the date of editing – 21 August 2024.
