When buying a property in New Zealand, one of the most crucial decisions you’ll make is how you want to legally own the property. The two most common forms of ownership are joint ownership (joint tenancy) and tenants in common. Choosing the right structure is essential, as it impacts what happens to your property if one owner passes away or if the property is sold.

Joint Ownership (Joint Tenancy) – What Does It Mean?

Joint ownership, legally referred to as joint tenancy, means that all owners have equal rights to the property. The key characteristic of joint tenancy is the right of survivorship—if one owner passes away, their share automatically transfers to the surviving owner(s).

Pros of Joint Ownership:

✔ The property automatically transfers to the surviving owner, avoiding probate delays.
✔ Simpler ownership structure for couples who want to keep things straightforward.

Cons of Joint Ownership:

❌ If one owner dies, their share does not form part of their estate—meaning their children or other beneficiaries may not inherit the property.
❌ The surviving owner has full control over the property and can leave it to whoever they choose in their Will.

Example:

A couple, both with children from previous relationships, bought a home together. Initially, they chose joint ownership, but their lawyer advised them this meant the property would pass entirely to the surviving partner, potentially excluding the deceased partner’s children. To ensure each of their children inherited their fair share, they opted for tenants in common instead.

Tenants in Common – A More Flexible Option

With tenants in common, each owner holds a specific share of the property, which can be equal or unequal (e.g., 50/50 or 70/30). This ownership structure allows each owner to pass their share of the property to beneficiaries in their Will.

Pros of Tenants in Common:

✔ Each owner’s share is protected and can be left to their chosen beneficiaries.
✔ Allows flexibility in ownership proportions—ideal for friends, family, or business partners buying property together.
✔ Provides an option for one owner to leave a life interest to a partner while ensuring their share ultimately passes to their children.

Cons of Tenants in Common:

❌ Unlike joint tenancy, the property does not automatically transfer to the other owner when one passes away.
❌ Probate is required, which can cause delays in transferring ownership to beneficiaries.

Which Ownership Structure Is Right for You?

• If you want the property to automatically pass to the other owner when you die, joint ownership is best.
• If you want control over who inherits your share, tenants in common is the better option.
• If contributing different amounts to the purchase, tenants in common ensures each person’s financial interest is recorded correctly.
• Couples who want to ensure their children inherit their share should opt for tenants in common and update their Wills accordingly.

Other Options – Trusts & Companies

Some buyers choose to hold property in a trust or company, particularly for asset protection, business purposes, or tax planning. This can offer additional security and flexibility, but requires legal and financial advice.

Final Thoughts – Get Expert Legal Advice

Your ownership structure affects your long-term asset planning, inheritance, and financial security. Before buying, ensure you fully understand your options and choose the right structure to protect your interests. Consulting a property lawyer will help you make an informed decision and avoid legal complications later.

For expert legal advice in Masterton and Wellington, contact a trusted law firm to discuss the best property ownership structure for your needs.

Need guidance on the RMA changes or their implications? Contact Core Legal Wellington for expert advice tailored to your needs.