Joint ownership can be further broken down into joint tenants and tenants in common. The use of joint ownership is not restricted to a couple, but may be any number of individuals. Unless otherwise stated, the share of ownership will be taken to be split evenly among the number of owners. Any other proportional ownership, such as a 60/40 split between two or more owners should be fully documented because the proportion of ownership determines their share of the distribution of income and/or capital proceeds from the future sale of the property. Note also that an unequal split of ownership can only be achieved through a ‘tenants in common’ arrangement and must be reflected on the title deed at settlement.
Once the property is sold, any adjustment in the percentage ownership will be considered an event for capital gains tax purposes and the portion moved from one joint owner to another will incur an assessment for capital gains tax.
Joint ownership provides a degree of control for all the interested parties. In the event of the death of one of the owners, the right to the property passes in the following manner:
The deceased’s share of the ownership passes directly to the surviving owners, bypassing the estate of the deceased and escaping the attention of any creditors to the estate.
Tenants in common
The deceased’s share of the ownership passes to their estate and the new joint owner of the property is determined in accordance with the directions given in the will.
The legal property owner is the sole person able to make decisions about the property, including selling it. Also, under the terms of the Centrelink income and assets test, all assets of a couple are tested whether in the name of the person applying for the benefit or not.