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When there is more than one Buyer purchasing a property in Queensland, the issue of Tenancy will occur. There are two ways in which two or more Buyers can hold the ownership of the property; Joint Tenants and Tenants in Common.
If Buyers are purchasing property as Joint Tenants, on the death of one party, the share of the deceased is automatically obtained by the surviving party. This is irrespective of any Will that may have been in place of the deceased party. Joint Tenants is not applicable where the parties wish to hold the property in unequal shares.
Tenants in Common
Contrary to Joint Tenants, if the Buyers are purchasing the property as Tenants in Common the deceased’s share of the property will pass in accordance with their will. In the instance that the deceased dies with the absence of a valid will (intestate), then their share will be distributed in accordance with the laws of Intestacy.
Tenants in Common can be held in equal shares or unequal shares. The percentage of the interest in shares can be determined by the parties. For example, one party may hold 99% of the property interest and the other party may hold 1% of the interest or any other percentage distribution. This can be beneficial for taxation purposes, Foreign Acquirers Duty or asset protection reasons.
The interest percent that each party holds of the property may affect the amount of Transfer Duty that is payable. For example, when Buyer 1 holds 70% and is a first home owner eligible for the First Home Owners Concession but Buyer 2 is buying 30% interest of the property as an investment then the Transfer Duty concession will be applied to 70% but the remaining 30% will be charged at full rate.
Buyers need to advise their Solicitor or conveyancing agent of their chosen tenancy, whether that is Joint Tenants or Tenants in Common (including the percentage each party will hold) before the Transfer documentation is completed.
If you are having difficulty deciding whether you wish to elect Joint Tenants or Tenants in Common, Rapid Legal Solutions offers professional advice on Wills, Estate Planning and Succession in addition to Conveyancing.
This document offers general information only and should not be relied upon as legal advice under any circumstances. Please do not hesitate to contact Rapid Conveyancing on (07) 4755 9150 to speak with one of our friendly professionals if you require assistance with your conveyancing matter.