Choosing between joint tenancy and tenant in common plays a critical role in property transfer tax and what happens to the property upon death. This article will help you understand how joint tenancy and tenants in common differ.
What is Joint Tenancy?
Joint tenants share a “Right of Survivorship” which ensures that the property is passed on to the other owner upon death, without the probate process. If a joint tenant dies without a will, the property passes to the joint owner.
What are the Benefits of Joint Tenancy?
No taxation on the sale
One critical reason for holding property in a joint tenancy rather than as tenants in common is that there won’t be any capital gains tax on the sale of the property.
Avoid probate costs
Upon the death of a joint tenant, that owner’s share of the property transfers to the deceased joint owner’s designated beneficiary without having to go through probate court.
What are Tenants in Common?
Each tenant in common has a separate ownership share of the property, which means that each tenant has control over ownership upon death. Tenants in common can freely decide on the amount of ownership each tenant has.
What are the Benefits of Tenants in Common?
Freedom to transfer property
Each tenant in common owns a separate ownership share of the property at will. When a tenant in common passes, their ownership can be sold or transferred.
Which is Right For Me?
Joint tenancy vs. tenants in common is a personal decision. Understanding the benefits and drawbacks of each property title will help prospective home buyers make an informed decision.
Zancope Notary can provide planning and notarization services for real estate transactions. Book an appointment today to get professional advice.
At Zancope Notary Public, our specialty is Wills and Estate Planning documents (Representation Agreement and Power of Attorney). We are a full-service firm with two notaries full time at the office. We also offer real estate services for clients in Langley and throughout Greater Vancouver and the Fraser Valley. We can help you with buying, selling, and refinancing real estate, and provide family property transfers and independent legal advice.
If you have any questions about this article or estate planning, in general, or if you want to make an appointment with Zancope Notary Public, please contact us at (604) 260-6783.
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