Ask a solicitor: Joint tenancy vs tenancy in common for unmarried couples in Ireland

My partner and I plan to buy a property together and are unsure of the legal consequences if one of us was to die or if our relationship were to break down

Deciding how to hold property jointly is not merely an administrative step. It is a fundamental decision that should be carefully considered in light of inheritance, tax, and relationship breakdown risks.

Dear Alex,

My partner and I are not married, but we are planning to buy a property together. We are both contributing to the purchase, although not in equal amounts. When looking at the paperwork, we were asked whether we wanted to be registered as joint tenants or as tenants in common. 

We are unsure what the difference is and what the legal consequences might be, particularly if one of us were to die or if our relationship were to break down. What should we be considering before deciding how to proceed?

Dear Reader,

This is a very common query, particularly as more unmarried couples are purchasing property together in Ireland. The way in which you are registered on title is extremely important and can have long-term legal, financial, and tax implications.

There are two primary ways of owning property jointly in Ireland: joint tenancy and tenancy in common. Although they may appear similar, they operate very differently.

Where property is held as a joint tenancy, both parties are treated in law as owning the whole property together. There are no defined shares. The defining feature of a joint tenancy is the right of survivorship, meaning if one owner dies, their interest in the property automatically passes to the surviving owner. This happens regardless of the contents of the deceased’s will, and the property does not form part of the deceased’s estate.

While this can provide certainty, it may not always be appropriate for unmarried couples. If one partner dies and the entire property passes automatically to the other, this transfer may give rise to capital acquisitions tax, as unmarried partners do not benefit from the spouse exemption. Depending on the value of the property and the circumstances, this can result in an unexpected and significant tax liability.

A tenancy in common operates differently. Under this arrangement, each owner holds a distinct share in the property. These shares can be equal or unequal and should reflect the financial contributions made by each party. There is no right of survivorship.

If one tenant in common dies, their share passes in accordance with their will or, if no will exists, under the rules of intestacy.

This form of ownership is often more suitable for unmarried couples, particularly where contributions to the purchase price or mortgage repayments are not equal, or where each party wishes their share of the property to pass to specific beneficiaries, such as children or other family members.

Another important consideration is what happens if the relationship breaks down. This is an issue that many couples understandably do not want to contemplate at the outset, but it is crucial to address it in advance. Disputes can arise where there is uncertainty about who is entitled to what, especially if one party has contributed more financially or has paid for renovations or ongoing maintenance.

In these circumstances, it is highly advisable to put a co-ownership agreement in place. This agreement can record each party’s financial contributions, how mortgage repayments and household expenses are to be dealt with, and what is to happen if the property is sold or if one party wishes to buy out the other. It can also address practical matters such as how a sale is to be agreed and how any proceeds are to be divided.

A co-ownership agreement provides clarity, protects both parties, and significantly reduces the risk of costly disputes in the future. It ensures the legal position reflects the reality of the arrangement between the parties.

Deciding how to hold property jointly is not merely an administrative step. It is a fundamental decision that should be carefully considered in light of inheritance, tax, and relationship breakdown risks.

Proper advice and clear documentation at the outset can prevent serious difficulties later on and provide peace of mind for both parties as they move forward together.

Alex Krupa LLB specialises in family law, enduring power of attorney and applications in respect of mental capacity and assisted decision-making and is a solicitor practising in Walsh & Partners Solicitors LLP, 88 Main Street, Midleton, Co Cork.

Email: [e-mail] 

Web: www.walshandpartners.ie

• While every effort is taken to ensure the accuracy of the information contained in this article, solicitor Alex Krupa does not accept responsibility for errors or omissions, howsoever arising. Readers should seek legal advice in relation to their particular circumstances at the earliest opportunity.