Buying a First Home: Joint Tenants, or Tenants in Common?

kyttiekat on 27/11/2019 - 16:16
Last edited 27/11/2019 - 22:18

Hi all,

Looking for some advice about owning property with a partner, and whether to own it as 'Joint Tenants' or 'Tenants in Common'. I'd really appreciate any advice or recommendations. I've also included a quick poll.

As some background, my partner and I have put down a 20% deposit on our first home, and we settle in late January. We currently live together in a rental as a de facto couple. We intend to marry in the next few years. We are in NSW.

I have put in almost 100% of the deposit, but he will likely be making 70%+ of the mortgage repayments in the near future.

Originally, our solicitor asked whether we want to own the property as joint tenants (which I understand means a 50/50 share), or as tenants in common (where we can nominate a different distribution, eg 80/20). More recently, however, he said that we should go in as joint tenants because "even if you nominated a split via tenants in common, it may have no impact, given the fact that de facto relationships are as good as marriage in property"

My questions are:
1. Since we are in a defacto relationship, is it true that we should just be joint tenants? If so, when would tenants in common be suitable then?
2. If we can own the property as tenants in common - then clearly, in the first few years, my contribution will have been very large but later on it will even out. Is it possible to change the nominated split later? eg start with 90/10 and later change to 60/40 etc? (solicitor said this is extremely difficult to do and generally "not done").
3. Does all of the above only apply to a death of one partner, or also just a breakup?
4. My partner also received a sizeable gift of cash from his family that he is thinking of putting into the mortgage as well. Would I be right to assume that this would then count towards his 'contribution'?
5. Where do wills fit into this?
6. Where do 'Binding Financial Agreements' (pre-nup agreements) fit into this?
7. How would you personally protect yourself from an early breakup / death in terms of having a much higher contribution to the property in the first few years?
8. Any horror stories to share?

Many thanks! Feel free to answer one, all, or none of the questions. :)

Poll Options expired

  • 87
    I am in a defacto/married relationship and own property as 'joint tenants'.
  • 8
    I am in a defacto/married relationship and own property as 'tenants in common'.
  • 1
    We started off as 'tenants in common' and have since changed to 'joint tenants'.
  • 0
    We started off as 'joint tenants' and have since changed to 'tenants in common'.
  • 19
    I own property independently.
  • 11
    I do not own property yet.
  • 55
    I hate Sydney property prices.
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Comments

  • dcep on 27/11/2019 - 16:23
    +25
    1. Any horror stories to share?

    with all those questions on 50:50 / 90:10 / 60:40 ,

    you're not ready to commit , then don't do it

    • kyttiekat on 27/11/2019 - 17:17

      We're definitely ready to commit. :) I just like to know as much info as possible.

      • brendanm on 27/11/2019 - 18:49
        +13

        Then why would 50/50 bother you?

        • kyttiekat on 27/11/2019 - 21:54

          50/50 would bother me in the theoretical situation that we do have a messy breakup, very early into our home ownership… In which case I will have contributed 90%+, and would not want it split 50/50. I figure it's better to be safe than sorry.

          In the case of breaking up, though, I've learned from this thread that the courts will consider all contributions or lack of (if it does get that messy), so the 'joint tenancy' vs 'tenants in common' won't be so relevant. That puts my mind at ease re: the breaking up.

          That leaves the situation of one of us passing before the other, in which case we're happy with joint tenancy (which, again I've learned, would be automatically what is considered since we are defacto).

          • doodo477 on 28/11/2019 - 12:07
            +2

            @kyttiekat: The 50/50 and or the court proceedings isn't the big deal during a break-up. The biggest problem is being escorted out of your residency due to false or miss-leading/fraudulent DVO allegation's. You can see your-self being escorted out of a residency within 4 hours by the sheriff then have to appear within four day's at your local court house to defend yourself.

            • ozbjunkie on 28/11/2019 - 12:17
              +10

              @doodo477: Pretty sure OP is not male, so she should be ok here.
              But don't give her any ideas…

              • doodo477 on 28/11/2019 - 16:48
                +1

                @ozbjunkie: True ozbargainer, get the dog and house for free!

            • kyttiekat on 29/11/2019 - 07:27

              @doodo477: That's really terrible, when false.

              • doodo477 on 29/11/2019 - 09:30
                -1

                @kyttiekat: Sometimes its for the best. Though in the event of a break up in the future you're pretty much protected and can remain within the family home until matters are resolved. Any threat, abuse, intimidation and you can get a DVO served and appointed free legal aid.

            • Cyphar on 29/11/2019 - 08:33

              @doodo477: Current wait times between being served a DVO and the initial hearings in court is 90 days, not 4

          • KozieSeller on 28/11/2019 - 14:45
            +1

            @kyttiekat: Honestly does the 50/50 bother because you feel that guys should be the one contributing more, due to past traditions? Everything him and you at 'every step' of your life should be exactly 50/50 from now on if you want equality. Sorry this is not just you but in general too everyone wanting equality, including every perk in life

            • kyttiekat on 29/11/2019 - 10:12

              @KozieSeller: I used to think we could do everything 50/50 at every step of our lives, but turns out it's not very realistic when life throws things at you (illness, job change, possible postgrad studies etc).

              Definitely nothing to do with gender! I don't mind putting down the deposit, but I wanted to explore my options if something horrible happened, and make sure we're both choosing the best thing for us.

          • neosin on 28/11/2019 - 20:03
            -8

            @kyttiekat: Why are you putting down 100% of the 20% deposit?

            The simple and logical solution is don’t buy until he can fork out 50%!

            If he can’t pay 50% tell him to borrow money from his side of the family.

            If he still can’t do that, find another man!

            Imo, if a man doesn’t have enough money to pay 50% of a deposit then there is no way in hell he can support a family.

            • doodo477 on 29/11/2019 - 09:16

              @neosin: That's sexiest.

            • Agret on 29/11/2019 - 11:30
              +2

              @neosin:

              Imo, if a man doesn’t have enough money to pay 50% of a deposit then there is no way in hell he can support a family.

              No reason to apply gender roles here, when the time comes he could end up being the stay at home parent and OP continues to work

      • LFO on 28/11/2019 - 14:20
        +4

        We're definitely ready to commit

        but

        the theoretical situation that we do have a messy breakup

        clearly indicates

        then don't do it

        I'll never understand starting a deal as a couple but taking one-thousand and one precautions for when the deal collapses.
        It doesn't sound as real commitment. Just convenient and opportunistic.

        • abb on 29/11/2019 - 12:01
          +4

          I'll never understand starting a deal as a couple but taking one-thousand and one precautions for when the deal collapses.

          It's a low probability, but high consequence (half of OP's life savings could be wiped out!)

          Similar to driving a car - you wear your seatbelt even though you have no expectation of crashing, because in that unlikely event, it might save your life.

          If you look around any relationship advice forum, you'll find hundreds of examples of people who were 100% sure about their partner being 'the one' and then got cheated on / dumped / abused / etc …

          • jatyap on 29/11/2019 - 17:59
            +1

            @abb: Agree with this. OP is just getting information as it is a realistic possibility in all marriages/partnerships.

      • Flyingmoo on 29/11/2019 - 09:28
        +1

        If you are thinking about exit plans, you are not ready

        • shreav on 30/11/2019 - 00:59
          +1

          I'd argue this is more of a safety net…

      • Hangryuman on 30/11/2019 - 12:20

        risk of tenants in common is your partners share if they separate or die can end up owned by someone you didn't choose, don't get on with, and who can demand it be sold when you want to keep it, etc.

        but it could probably get equally ugly in divorce with joint tenancy title.

        my first house was bought tenants in common with a girlfriend at the time - she was keen, I had inherited some money - I forget the share but she was a smaller share like 10-30% - anyhoo we went our separate ways (via some heartbreak) but I was a nice guy and paid out her market-growth double-money share maybe 3-5 years later which she was happy with.

        in nsw defacto is considered similar to marriage after 5 years cohabitation/spousal relationship I believe, but tenants-in-common in differing shares would probably be respected as on breakup of a defacto r/ship (which is less likely to go to court - Not family court I believe, maybe Local court) they tend to look at what each brought to the relationship, e.g. came with. So e.g. 80:20 tenancy-in-common would probably be respected by the court on a breakup of defacto. Marriage - probably more awkward.

        of course, toss some sprogs into the mix, and it's all about support for the bubs

        'How would you personally protect yourself from an early breakup / death in terms of having a much higher contribution to the property in the first few years?'

        start with tenancy-in-common - but a recent discussion here on ozb showed a great majority saying that's no way to start a marriage - trust - who trussed who, etc.

    • blimpyboy on 29/11/2019 - 01:13
      +9

      you're not ready to commit

      I'll never understand starting a deal as a couple but taking one-thousand and one precautions for when the deal collapses.

      People who don't take precautions against the misfortunes of life are fools.

      Houses burn down. Businesses fail. Friendships get lost. And marriages, sadly, do break down.

      Commitment comes in many forms. You might find that by learning and understanding the process of buying a house together, then discussing it with their partner openly and honestly, this actually strengthens OP's relationship.

      • dcep on 29/11/2019 - 01:32
        -3

        when you're talking 90:10 / 60:40 , and who contributes more, who earns less / more

        your relationship won't last and is bound to fail right from the beginning

        • RockyRaccoon on 30/11/2019 - 09:15

          And talking now is very important.

          Now when its time to implement, if you are at 90:10 then you might want to consider carefully the relationship.

          But you need to know the options

      • LFO on 29/11/2019 - 21:32
        -2

        And marriages, sadly, do break down

        Correction: SOME marriages break down.
        Probably those that start with the one-thousand and one precautions are the ones doomed to fail. From start!

        Marriage is supposed to be for LOVE.
        Unquestionable love to each other.
        Marriage is no longer something you "need" in our society.
        It is a commitment (real marriage that is) to each other. Because of real pure love. Without "precautions".

  • orangetrain on 27/11/2019 - 16:32

    What did your partner say when you asked him?

    • pyramid on 27/11/2019 - 16:37
      +21

      He redirected question to ozb in-house property experts…

      • markathome on 27/11/2019 - 17:04
        +2

        Who in turn will refer her to bikies…you know it's going that way.

        • Meconium on 28/11/2019 - 19:43
          +1

          Come on, this isn't an $80k high-yield investment vehicle we're talking about here.

    • kyttiekat on 27/11/2019 - 17:17
      +1

      He was happy to do a split (majority to me) if applicable. We're just trying to understand all our options.

      • Zonty on 29/11/2019 - 09:22

        Not sure your case, but my case I am paying similar 70% my self and 30% my partner and entire deposit I paid myself, but thing is she does work more at home such as keep tidy home and laundry etc. my job is cooking and gardening but I earn more then her. So basically when you married you not think who makes what.
        But think big picture if you get pregnant and not able make same money you will be legally liable to pay your % when you relationship or job will be not same. If you have doubt about your relationship then make some contract that when house will be sell deposit what you will be paid you will get first and rest balance after mortgage ( loss and profit )will be share equally.

  • onetwothreefour on 27/11/2019 - 16:35
    +44

    I own the house and my wife rents a room. Gonna kick her out soon as she hasn't paid rent in years.

    • geek001 on 27/11/2019 - 17:06
      +15

      Don't do it. If you did, she will end up owning the house in the divorce settlement and you will be renting from her instead.

    • kyttiekat on 27/11/2019 - 17:23
      -5

      I can't tell if you're joking or serious, eek.

      • No ONE on 28/11/2019 - 13:59
        +2

        Seriously, you can't tell! Check his votes:

        more + = he's got a sense of humour
        More - = serious

  • Archi on 27/11/2019 - 16:38
    +13

    I have been married for 10 years have owned 2 different properties.

    1st one was entirely in mrs archi's name to get first home owners grant. mortgage repayments and bills were all shared. I earn more and contributed more.
    sold first home and bought second home all money from the sale went to the new home all expenses are shared and have a small mortgage I still earn more and contribute more and second home is entirely in mrs archi's name.

    still married, still living there, still paying bills. if you cant talk over a simple thing like money and finances.. it will be the thing that ends your marriage,

    • kyttiekat on 27/11/2019 - 17:22
      +1

      Thanks for your experience, Archi! Much appreciated. Thankfully, we can discuss our finances very openly. It's good to hear from others.

    • kipps on 27/11/2019 - 21:53
      +2

      Be very careful with this - as far advancements in feminism have come - us blokes now get the raw end of the deal - the presumption of advancement means that normally if blokes contribute to the purchase price we would normally be able to claim a resulting trust to the extent of the purchase price whereas if husband advances it for a wife it is presumed to be a gift to her alone. It’s sexist as it sounds.

      • Blitz001 on 28/11/2019 - 14:51
        -5

        About time women get some advantage in life.

    • LFO on 28/11/2019 - 14:24

      still married, still living there, still paying bills

      But you are still paying more.

      No wonder all is good.

      • Archi on 28/11/2019 - 14:39
        +4

        I guess its not about paying more or less… its a perceived agreement in a way that we do things collectively for the family

        wife does more on other things and pays more for other things…
        eg I don't ever pay for lunch or dinner or groceries unless they are on the credit card. most cash transaction wife looks after (because I have none :P)

        I do differerent tasks and she looks after different things…
        its sharing but not distinctive where we need to stipulate OMG you owe $1.50 in change for dinner

        • Hangryuman on 30/11/2019 - 12:34

          I brought almost all the money to our relationship - I pay all the bills – she’s only ever been a low income earner - but she makes me happy - she's also a great cook who keeps me healthy and alive - I reckon she's saved me many times.

          We complement each other - I'm strong where she is weak, she's strong where I am weak – I have a high IQ, she has a high EQ - together we are a perfect match like no-one else I've known.

          I agreed with a female friend in a comparable opposite relationship - we had a brief discussion about the fact that she brought all the money to their relationship where he was essentially a hardly-earner - she said she was happy to support him financially because he was the only one who made her happy - I said #MeToo

  • pjetson on 27/11/2019 - 16:40
    +1

    It sounds like your solicitor has already offered his/her advice. Are you just worried that you don't understand it enough?

    • kyttiekat on 27/11/2019 - 17:26

      That's right. And his advice seemed to change - first it was go with tenants in common with a split towards me, then it was to go with joint tenants only.

      I don't understand when 'tenants in common' would apply, if not for defacto/married relationships - is it only for other partnerships? (friends / siblings etc)

      • jacross on 28/11/2019 - 08:21

        From your post you stated that your solicitor originally asked what option you wanted to pursue. You are silent on any advice provided at that juncture.

        In any case, listen to your lawyer or get a new one. Ozbargain is trashbags when it comes to legal advice.

        • kyttiekat on 28/11/2019 - 11:04
          +1

          Hi jacross, our solicitor asked which option we wanted (via email), then immediately emailed again to say it wouldn't matter because we're in a long-term relationship and should stick to 'joint tenancy'. When I called to clarify, he said the same thing again and was very light on details / rushed / not interested in explaining further. I suggested we might see him in person to discuss more. If that is still unhelpful, then yes we might see someone else just in case.

          In the meantime, I thought I'd see what others had typically done. :)

          • Hangryuman on 30/11/2019 - 12:36

            @kyttiekat: a lawyer is someone who will work hard for you until all your money is gone …

  • 87percent on 27/11/2019 - 16:42
    +1

    IMO, it won’t matter once/if you get married. What’s yours is theirs

    • [Deactivated] on 27/11/2019 - 16:45
      +5

      Isn't that same with defacto?

    • kyttiekat on 27/11/2019 - 17:27

      So are you saying that a 'tenants in common' split would be ineffective if married? (I assume same for defacto)

      • arkie0 on 27/11/2019 - 18:51
        +4

        That is correct, in a divorce situation ALL assets get pooled regardless of ownership and you (or the courts) decide on a split.

        • dcep on 27/11/2019 - 21:54

          asking for friend, do you know if it's easy to "hide" or "move" asset, prior to filing divorce ?

        • kyttiekat on 27/11/2019 - 21:56

          Perfect, thanks! That would work out fairly for us, then.

  • [Deactivated] on 27/11/2019 - 16:45
    +3

    The family court will still look at the contributions from either side if you decide to split up.

    I still recommend joint tenants which means if either of you dies then it passes automatically and isn't scrounged up by some other family members or third brother or something. That's if either of you die intestate, without a will; or if somehow the will magically disappears.

    • kyttiekat on 27/11/2019 - 17:30
      +1

      Thanks for your insight, FruityAddon.

      Why does dying interstate vs in the same state matter?

      It sounds like if we break up, family court will look at both contributions, and if either one of us dies, then it's safest to be joint tenants to avoid other family members/whoever jumping in. Does that sound right?

      In that case, what happens if one partner dies but DOES want part of the property to pass on to their sibling? (not saying this is the case with us). Is this when tenants in common applies?

      • [Deactivated] on 27/11/2019 - 19:59
        +1

        Yep.

      • TheBilly on 27/11/2019 - 21:39
        +7

        Why does dying interstate vs in the same state matter?

        Because if the partner still alive doesnt get on the plane quick enough to take posession of the house when the other dies, the house goes to the first family member that claims it by planting a flag at the front door.

        • kyttiekat on 27/11/2019 - 21:58

          Yikes. Thanks for the explanation.

          • vetopower on 28/11/2019 - 19:42
            +5

            @kyttiekat: Here's the serious answer to complement the funny one.

            The poster was talking about dying intestate, not interstate.

            Intestate means dying without a will.

            Edit: Oops, see this response has already been added below. Sorry.

    • Almost Banned on 27/11/2019 - 18:35

      Nope - if you are joint tenants it doesn't matter if you die intestate or have a will. Survivorship will win. You cannot pass what you don't own, and you do not own any specific interest in a joint tenancy.

      • [Deactivated] on 27/11/2019 - 19:59

        Yeah, that's what I meant by the recommendation, as opposed to choosing tenants in common.

      • acer4una on 28/11/2019 - 08:39
        +3

        I think OP got confused with the last few comments, where dying intestate is thought as dying interstate. Dying intestate is dying without a will.

        • kyttiekat on 28/11/2019 - 11:05

          Oops - you're right. I read it as interstate. Thanks for the heads up.

  • rompastompa on 27/11/2019 - 16:46
    +21

    8 - Any horror stories to share?

    My de facto relationship turned into a marriage..

    • kyttiekat on 27/11/2019 - 17:31
      +1

      I hope it's a fulfilling marriage for both of you. :)

  • ozhunter on 27/11/2019 - 16:50
    +1

    4 - Why wouldn't it?

    • kyttiekat on 27/11/2019 - 17:33

      No idea. I assumed yes. I'm trying to check all my assumptions since I know very little about this area (but I'm learning lots!). Same with partner - we've been digesting all info as quickly as possible, and there's a lot of it!

  • Seraphin7 on 27/11/2019 - 16:51
    +12

    1 Since we are in a defacto relationship, is it true that we should just be joint tenants? If so, when would tenants in common be suitable then?

    No. The de facto relationship does not mean "you should just be joint tenants" necessarily. Tenants in common is applicable where you want to have (1) a different share of ownership than 50/50 that usually also mean you set up separate mortgage accounts, and (2) you don't want the other party to "automatically" inherit your share on your death. This second point is often missed. In a joint tenancy arrangement, ownership passes to the surviving partner automatically, where as with tenants in common in can be passed to anyone via your will. Of course in both cases the situation can be challenged in court, but these are the two different "starting positions".

    2 If we can own the property as tenants in common - then clearly, in the first few years, my contribution will have been very large but later on it will even out. Is it possible to change the nominated split later? eg start with 90/10 and later change to 60/40 etc? (solicitor said this is extremely difficult to do and generally "not done").

    Your solicitor is correct. Changes to the ownership ratios are effectively treated as sales and therefore a nightmare for any number of reasons.

    3 Does all of the above only apply to a death of one partner, or also just a breakup?

    Re. death, see question 1. The break up of a relationship is a whole other area of law. Pending how "bitter" such a break up is (i.e. how much people want to fight over assets), you're basically off to the courts to determine who gets what regardless of the structures you've set up. This will of course involve all other assets/liabilities as well.

    4 My partner also received a sizeable gift of cash from his family that he is thinking of putting into the mortgage as well. Would I be right to assume that this would then count towards his 'contribution'?

    Somewhat refer to question 3, but in general terms, once an asset comes into a relationship (regardless of its source), it's up from grabs in a "break up" situation.

    5 Where do wills fit into this?

    See question 1.

    6 Where do 'Binding Financial Agreements' (pre-nup agreements) fit into this?

    You'd need to take legal advice on this matter. My understanding is they can be useful, but they become less "reliable" as time passes and situations change (i.e. career/income changes, children, liabilities, etc.).

    7 How would you personally protect yourself from an early breakup / death in terms of having a much higher contribution to the property in the first few years?

    I think you need to consider death and break up quite differently. In a death situation, who are you "protecting"? In a break up, take advice from lawyers. This may be where your "pre-nup" can work at least if it all goes south quickly. At the very least I would be carefully documenting precisely who has contributed what.

    • Typical16-bitEnjoyer on 27/11/2019 - 17:21
      +1

      No. The de facto relationship does not mean "you should just be joint tenants" necessarily. Tenants in common is applicable where you want to have (1) a different share of ownership than 50/50 that usually also mean you set up separate mortgage accounts, and (2) you don't want the other party to "automatically" inherit your share on your death.

      Exactly this. Key difference is at passing.

      I hope OP has simply summarised their lawyer's advice in their own words in their first post. If that was the extent of the actual advice then OP needs to go elsewhere pronto.

      • kyttiekat on 27/11/2019 - 17:36

        No summary here. That was the extent of the conversation. :(

        Thus trying to find out if there's more to it or if I should be satisfied with their response.

        • Typical16-bitEnjoyer on 27/11/2019 - 21:53

          Take your file somewhere else. Seriously.

          It's not a "big" issue or decision as such but you need to know the differences and which of those adheres best to your specific private circumstances.

    • kyttiekat on 27/11/2019 - 17:45
      +1

      Hi, thank you so much for your detailed and very helpful response.

      With a will, does this mean that a will (upon passing) would be irrelevant in a joint tenancy?

      Also, if one were to go with 'tenants in common' so that the property does not automatically pass in full to the partner if one passes - why would this be done? I'm understanding that most people go with a joint tenancy. eg would you do 'tenants in common' if you… don't trust your partner? Or have many siblings? Or maybe your family contributed a lot to the property as well? Or what's the general use case here?

      (For the record, none of the situations above apply to us, i.e. we have a great, open and trusting relationship, but I'm just theoretically wondering why tenants in common would be chosen).

      Also, in the event of a breakup, I'm relieved to know that everything else will be considered. And it sounds like we should look into a prenup and our wills as well.

      • Seraphin7 on 27/11/2019 - 17:56
        +5

        With a will, does this mean that a will (upon passing) would be irrelevant in a joint tenancy?

        I'll speak only to the asset in question, not other assets. Ownership of assets under joint ownership (i.e. including joint tenancy) will pass to the surviving party. Or more specifically, they cannot be bequeathed to another party. There may be circumstances where parties can challenge what happens at death, but they would need to establish that they have some claim over the assets and have this situation (ultimately) determined by a court.

        Also, if one were to go with 'tenants in common' so that the property does not automatically pass in full to the partner if one passes - why would this be done?

        The most common "use case" is where there is no marriage/de facto/dependency relationship between the parties. Probably the best/easiest example is when a property is owned by siblings (or any other arrangement such as friends/"business partners"). Each party wishes to keep their share entirely divisible from other parties. The key here is the lack of a marriage/de facto/dependency relationship.

        Hi, thank you so much for your detailed and very helpful response.

        Happy to help.

        • kyttiekat on 27/11/2019 - 18:00
          +1

          Hi Seraphin7, thanks again. Your responses make perfect sense and have satisfied my curiosity and put my mind at ease!

    • darkchoc on 28/11/2019 - 10:00
      +3

      Changing tenants in common percentages over time is a no go. Stamp duty, legal fees etc all occur making it a nightmare.

      Joint tenancy is simple. Probably your best bet.

      I've heard that tenants in common with a 50:50 split gives you much more flexibility than joint tenancy.

      you'd need to have a will in place to express what you wish to happen upon death. You can change your will over time to reflect what you believe is equitable.

      Good luck!

      • kyttiekat on 28/11/2019 - 11:07

        Hi Newplace, thanks for your thoughts. Super helpful.

        When you say 'gives you much more flexibility', can you explain how so? ie when breaking up, or when one passes before the other?

        • darkchoc on 28/11/2019 - 16:55
          +2

          Tenants in common gives more flexibility:

          Upon death: does not automatically pass to co owners. But both of you must have wills otherwise it goes to the estate.

          Sell/transfer: you can sell your share or transfer your share to, say, your kids in the future. You could sell/transfer your stake and your partner can retain their stake, without each other's consent.

          Downsides: complexity with wills etc.

          I would make it simple and stick with joint tenancy - plan for the best. Over time, if you choose another percentage, it would be irrelevant as you'd both have contributed either through payments or looking after the family.

          But if you were to hedge your bets, set up a loan on paper with your partner that gets wiped out after, say, 5 years to protect your share of the deposit that you paid up front should the worst happen. Or you get your mum and dad to loan him his half (3rd party debt with the debtor in your favour!) Which gets chipped away over 5 years

        • Commander Shepard on 29/11/2019 - 21:39

          I had the same issue as you Kyttiekat a few months ago when my partner and I purchased a property together.

          As I covered the large deposit and pay the mortgage as I earn more, we agreed to a tenants in common 60:40 split my way. However on my will I give her 100% anyways.

          We plan to be together forever. And we trust each other enough to say that if one of us becomes a (####wit), we have an agreed split value of ownership to avoid things getting overly messy and complicated. Well that's the way we saw it….

  • arkie0 on 27/11/2019 - 17:07
    +4

    People on OzB are generally useless with their answers, plus your questions are fairly complicated and alot of information is needed to answer them especially with all the possible scenarios. This is not the forum to be asking these questions.

    1. Useful when its an investment property when one partner earns more than the other. The partner on the lower income can own the higher share thus receiving the greater portion of rent, reducing tax for the partner on the higher income. As a PPOR just do joint, its just easier.

    2. Possible, but you have to engage a conveyancer / solicitor each time. Costs $ and alot of work for not much benefit.

    3. Joint - On death, you receive the full 100% ownership of property. On break up, depends on the divorce settlement but usually no difference between joint/common.
      Common - On death, owned % is give to whoever is listed in the will. On break up, depends on the divorce settlement but usually no difference between joint/common.

    4. On break up, depends on the divorce settlement. Otherwise there is no his/her contribution, its your gift/contribution.

    5. Joint - Ownership goes to other partner, wills makes no difference.
      Common - On death, owned % is give to whoever is listed in the will. Gets really complication as challenges are possible especially with no will moving all assets into the estate.

    6. Too late, you are already in a defacto relationship if over 2 years together, by all purposes you are already married.

    7. Prenup prior to 2 years, although in australia this is more or less useless after kids. Afterwards, there is no "protection" everything is owned jointly.

    • kyttiekat on 27/11/2019 - 17:53

      Hi arkie0, thank you so much for the time to post a response. It's been incredibly helpful!

      I thought I'd ask on this forum because it seemed to be relevant to anyone else buying a property with a partner, which I assume is a lot of people.

      We've been together longer than 2yrs, so definitely no prenup then.

      Also, your explanation of why 'tenants in common' would be useful (in an investment property scenario) makes perfect sense now. I couldn't quite understand when it would be appropriate. This will just be our PPOR, so it sounds like 'joint' would be best.

      Thanks again!

      • arkie0 on 27/11/2019 - 18:48
        +1

        No problems, glad I could be of help.

    • onetwothreefour on 27/11/2019 - 19:01
      +1

      People on OzB are generally useless with their answers

      Pfft whatever

      • arkie0 on 27/11/2019 - 20:04
        +2

        /shrug your answer to OP proves my point. Yes funny, but ultimately useless.

  • EightImmortals on 27/11/2019 - 17:12
    +1

    We played with those ratios in the past to maximise the tax deductions for whoever had the bigger wage at the time. After a year or three our work situations inevitably changed meaning the person paying the lesser amount of tax ended up with most possible deductions.

    • kyttiekat on 27/11/2019 - 17:18

      Oh, interesting! Was this in relation to an owner-occupied home? Or for an investment property? We have very different incomes at the moment, so it may be something to consider. Although it sounds like it's for an IP.

      • EightImmortals on 27/11/2019 - 18:04
        +1

        Yup it was for an IP. In the case of OO we just go 50-50 as there are no tax implications (AFAIK). :)

        • kyttiekat on 28/11/2019 - 11:09

          50-50 tenants in common, or joint tenancy?

  • [Deactivated] on 27/11/2019 - 19:40

    Tenants in common + prenup when you get married.

    Curious as to what you think will be a fair split?

    • Typical16-bitEnjoyer on 27/11/2019 - 21:57

      Meh prenups aren't that great here in Oz. Plus they are already in the relationship before this purchase occurs.

      • [Deactivated] on 27/11/2019 - 22:37

        So I've heard. If my wife and I were ever to separate, I wouldn't get married again nor would I invite anyone to move in with us. It's the only way to protect their inheritance.

        • Typical16-bitEnjoyer on 28/11/2019 - 09:22
          +4

          Everyone says that until the meet the second partner/husband/wife :)

    • kyttiekat on 27/11/2019 - 22:16

      Why would you suggest tenants in common? Just wondering.

      We've been in a defacto relationship for a long time, so from what I understand now, a prenup would be ineffective.

      We were originally considering tenants in common and a fair split because I'll be contributing almost 100% of the deposit, and theoretically, if we had a messy breakup in Year 1 or 2 of home ownership, I will still have contributed a lot more. Partner was happy with 80/20 split, or even 90/10. We thought that we could change the ratio after a few years, but apparently this is difficult and uncommon.

      • [Deactivated] on 27/11/2019 - 22:34
        +2

        Because I wouldn't have gone with a 50/50 split. It's not fair to you.

        The best predictor of future behaviour is past behaviour : if he hasn't been able to save up for a deposit by now, can you really trust him when he says he'll pay his share, let alone the lion's share, of the mortgage in the future?

        As for, "my partner also received a sizeable gift of cash from his family that he is thinking of putting into the mortgage as well"… While he's 'thinking' of what to do with money that he hasn't actually earned, you're risking it all with your savings.

        If the relationship was to end next week, how much do you stand to lose? How much does he stand to lose?

        • brad1-8tsi on 28/11/2019 - 09:40

          The best predictor of future behaviour is past behaviour : if he hasn't been able to save up for a deposit by now, can you really trust him when he says he'll pay his share, let alone the lion's share, of the mortgage in the future?

          I know so many couples like this where one is the saver and the other just can't get their act together and sponges off the other and doesn't contribute - ever.

          My ex-SIL used to quit her job every time she went into a new relationship.

          • kyttiekat on 28/11/2019 - 11:22

            @brad1-8tsi: Ouch. That is definitely not ideal!

            In a way, my partner does have savings I guess - he just uses them all up every month to support the majority of our living expenses while I've been ill and working less. Otherwise, we're actively working together to watch our spending.

        • kyttiekat on 28/11/2019 - 11:20

          All good points, thank you.

          It's true he doesn't have savings, but he's been covering 60-70% of our living expenses for the last two years while I've been ill. We've also been trying to curb our (his!) spending lately, and it's been working well.

          From what I'm understanding, it seems that even if we choose to do a split via tenants in common, this will be ineffective if we break up because the courts will ignore it and do a proper assessment of all our shared assets etc (as we've been defacto for over 2yrs). I don't mind if that's the case - I assume the outcome would be fair to us both at that time.

          In terms of the gifted cash, we're thinking about putting aside some of it for a future wedding / rings etc. I suppose we can just park it in the offset account until then to keep things flexible. :)

          • trapper on 28/11/2019 - 13:50
            +2

            @kyttiekat: Why has he been covering 60-70% of the living expenses for the last two years while you are sitting on a large amount of savings (you have enough for 100% of the deposit).

            • Agret on 29/11/2019 - 11:43
              +2

              @trapper: on that note if he has been covering 60-70% of the expenses for the last 2yrs don't you think he deserves a 50-50 split even if you're paying the deposit 100% since surely if the numbers were flipped he could've been the one saving that money up for the deposit?

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