The joint ownership of a specific property is a massive milestone for many people. Reliable property settlement lawyers in Perth have said that joint ownership is a normal way for people to access the property market, especially when they’re purchasing a property to occupy it.
As property prices keep on increasing, the co-ownership of properties has become an excellent option. This option is ideal for all those individuals who are planning to purchase their first-ever commercial or residential property to enter the property market.
But right before they decide to use their funds to purchase a co-ownership property, it is crucial to speak with a reliable lawyer. They offer a detailed explanation of such properties and how to proceed further with the buying process.
Individuals will come across two types of joint properties, such as “joint tenants” and “tenants in common”. Let’s learn about them in detail:
This is a type of jointly owned property where an individual becomes eligible for all lower taxes and division regulations. When one decides to set up the joint owners as the “tenancy in common”, they will receive a defined share of that property.
Besides that, they will also get the opportunity to transfer their interests independently. This clearly shows that a co-owner contract will specify either the unequal or equal shares within the co-ownership of the property.
But based on the property law in Australia, regarding the enjoyment and usage of the property, each owner will not have a distinct physical share of that particular property.
This is a type of joint ownership property that enables equal interest and ownership within a particular property. In other words, one gets to own the interest of a property with another individual, and there is no presence of an individual interest within the property. The only difference between “tenancy in common” and “joint tenancy” is the right to survivorship that exists only in joint tenancy.
Besides that, the most common type of application under joint tenancy is when married couples have a co-ownership contract.
When an individual jointly owns a property with another person, and that person passes away, the ownership gets transferred to the surviving owner. The transfer of ownership occurs based on the arrangement of co-ownership.
The transfer of ownership after the death of one of the owners can be different in “tenancy in common” and “joint tenants”. Here is a detailed explanation of it:
Joint tenants are known to have equal shares within the ownership of a property or an asset. So, when one of the joint tenants passes away, the other tenant will have the right of survivorship. The interest of the deceased tenant is not the asset of their estate. But when it comes to the capital gains tax, the interest of the deceased tenant will be passed down in the form of equal shares among all the surviving tenants.
The surviving joint tenants will only receive the interest asset of the deceased tenant if they are the beneficiaries. This clearly shows that the said property was the deceased individual’s primary residence.
The surviving tenant might become eligible for the main residence exception for the attained interest.
Under tenancy in common, two or more individuals get to own a portion of a property individually. This portion can be unequal. People who have entered the tenants in common ownership can easily keep their property’s share with any person.
When one of the tenants in common passes, their property’s share becomes an asset for the deceased estate, and there is no presence of the right for survivorship. The interest of the deceased tenant in common within the property is:
Tenants in common do not have the right to lease, mortgage, or sell their share of the property. They can only do so when they don’t enter into a contract with the other tenants.
When a person is part of a joint property ownership, there are certain ways it can have a massive impact on tax obligations. These are:
Before signing a joint property ownership, one must speak with reliable and trusted commercial property lawyers in Perth to learn more about tax obligations. They can provide a detailed explanation on such matters, and it’s guaranteed it will help/her when they are planning to enter a joint ownership contract.
Jointly-owned properties have become an ideal choice for individuals these days. It’s one of the best ways to enjoy and own a certain property in this modern era. Before entering a joint ownership agreement, one must speak with a financial advisor to learn which ownership structure will perfectly match their monetary goals and circumstances.
Otherwise, consulting such matters with the property lawyers from Tang Law will help greatly. They have knowledge and experience in such areas and will surely offer their guidance to their clients without much hassle.