Tax planning for Joint Home ownership

If you think about buying property with another owner(s), you should ensure you understand your rights and obligations before a dispute occurs. One of the risks for example is that one partner fails to meet his loan repayments. In this case the bank hold the others partners liable for the debt. You will need to make sure you have an Agreement Between the Tenants so Interests of all the parties involved are protected.
There are usually two methods for holding a property with one more owner:

1. Joint tenants
Joint tenants can only hold property in equal shares 50-50. Upon the death of a joint tenant the share passes to the other joint tenant automatically. Therefore the most popular use of “Joint tenants” is in a marriage situation. Profits or losses from rental properties must be shared as well. In addition Joint tenants can’t sell off their share of the property without the permission of the other joint tenant

2. Tenants in common.
Tenants in common each have an identifiable interest in the property, Their shares can be unequal (60-40 for example). The most important factor however is that your shares are protected in the proportions you designate. Unlike Joint tenants, You can decide who will receive your share upon death by stating it in your will.

What should you choose?
We prefer tenants in common as you have more control in a case of a dispute, divorce or death. It also does not make any sense to hold as joint tenants in equal shares if the contributions of the parties are not the same.
In any case, it is important to note that if you choose one holding over the other it is possible to change the holding to the other form.

Tax Planning
You have to think twice before getting into co-ownership, as you will have to split the loss, no matter what the situation is for each partner. If one partner, for example, is in very high tax bracket and the other is not, you will still have to split the losses, therefore not gaining the benefit of claiming the loss on the high tax bracket partner.

Help others find this article at:

Filed under Tax strategies |

6 Responses to “Tax planning for Joint Home ownership”

1. Антон Павлович Says:
   March 18th, 2010 at 4:15 pm

   In this case the bank hold the others partners liable for the debt. You will need to […….

   Какая редкая удача! Какое счастье!…

2. Alex Gordon Says:
   April 4th, 2010 at 12:00 am

   Я считаю, что Вы ошибаетесь. Давайте обсудим это. Пишите мне в PM, пообщаемся….

   Художник-гримёр In this case the bank hold the others partners liable for the debt. You…

3. Kylie BattName Says:
   April 11th, 2010 at 7:03 am

   Вы попали в самую точку. Мысль отличная, согласен с Вами….

   Представитель торговый In this case the bank hold the others partners liable for the debt. You will need to […….

4. Kylie Batt Says:
   April 11th, 2010 at 10:18 pm

   хочу посотреть…

   Менеджер ведущий If you think about buying property with another owner(s), you should ensure you understand your rights and obligations before a dispute occurs…..

5. Kylie Batt Says:
   April 21st, 2010 at 10:45 am

   Я считаю, что Вы допускаете ошибку. Пишите мне в PM….

   Бухгалтер на участок / заместитель главного бухгалтера In this case the bank hold the others partners liable for the debt. You will need to […….

6. Kylie Batt Says:
   May 19th, 2010 at 10:54 pm

   молодчага…

   Зламаний меч Імперії. Калашников Максим. In this case the bank hold the others partners liable for the debt. You will need to […….

Leave a Reply

You must be logged in to post a comment.