What Happens to a Jointly Owned Property When One Owner Dies

What happens to a jointly owned property when one owner dies depends almost entirely on one detail recorded on the title: whether the owners held the property as joint tenants or as tenants in common. This single distinction determines whether the surviving owner automatically becomes the sole legal owner, or whether the deceased owner's share instead forms part of their estate and is distributed according to their will. Many people are surprised to learn that a will has no effect at all on a joint tenancy, regardless of what it says.

Joint Tenancy and the Right of Survivorship

Property held as joint tenants carries what is known as the right of survivorship. When one joint tenant dies, their interest does not pass through their estate at all. Instead, it passes automatically to the surviving joint tenant or tenants, regardless of anything written in a will. This is the arrangement most married couples and long-term partners use when buying a home together, precisely because it is designed to pass ownership smoothly to the survivor without the property needing to go through probate.

Tenants in Common Works Differently

Where the property was instead held as tenants in common, each owner holds a specific, separate share, which can be equal or unequal, and that share does form part of their estate when they die. It is distributed according to their will, or according to the rules of intestacy if they did not leave one. This means a deceased tenant in common's share could end up being inherited by someone who was not previously connected to the property at all, such as an adult child or another family member, who then becomes a co-owner alongside the surviving owner.

Updating the Title After a Death

For a joint tenancy, updating the title is usually a relatively simple administrative process. The surviving owner's conveyancer lodges a notice of death (sometimes called a survivorship application) with the land registry, along with a certified copy of the death certificate, so the register reflects that the deceased owner's name has been removed and the survivor now holds the property outright. There is generally no sale involved and, in most states, no transfer duty payable on this kind of survivorship transfer, since ownership passes by operation of law rather than by a transaction between parties.

For a tenancy in common, the process is more involved because the deceased owner's share needs to go through probate or letters of administration before it can be dealt with, and then be formally transferred from the estate to whoever inherits it under the deceased estate transfer process, which follows its own set of steps and timeframes.

What If the New Co-Owner Wants to Sell?

Where a tenancy in common share passes to someone who does not want to keep an ongoing interest in the property, such as an adult child who inherits a share alongside a surviving parent, the usual outcomes mirror those in any other co-owner buy-out: the surviving owner buys the inherited share, the property is sold and proceeds are split, or the parties agree to hold the property together going forward. Each of these needs proper conveyancing to formalise, even where family relationships mean everyone is in broad agreement about the outcome.

Checking How a Property Is Actually Held

Because the consequences of these two forms of ownership are so different, it is worth checking exactly how a property is held well before a death occurs, not after. A title search will confirm this, and couples who assume they hold a property jointly, when they actually hold it as tenants in common with unequal shares from an earlier refinance or transfer, can be caught out by outcomes they did not expect. If your circumstances have changed since a property was purchased, for example following a remarriage or a change in how you want assets distributed, it may be worth reviewing how the title is structured with your conveyancer.

Mortgages and Other Practical Matters

An existing mortgage does not automatically transfer to a surviving owner simply because the title has been updated. Lenders generally need to be notified of the death and may require the surviving owner to refinance the loan into their sole name, particularly if the deceased owner was the main income earner considered in the original lending decision. This is a separate conversation from the title update itself, but it often needs to happen around the same time.

Capital Gains Tax on an Inherited Share

Where a tenant in common's share passes into an estate and is later sold, rather than simply inherited and kept, capital gains tax can come into play, and the rules differ depending on whether the property was the deceased's main residence and how long it has been held since. The ATO's guidance on the main residence exemption sets out the general framework that applies to inherited dwellings, but this is general information rather than tax advice, and beneficiaries should speak with an accountant about their own position before deciding whether to sell or keep an inherited share.

Getting Advice Early

Because how a property is held affects both estate planning and what happens practically after a death, it is worth discussing this with a conveyancer or estate planning solicitor while all parties are able to make decisions together, rather than leaving it to be worked out under pressure. If you are dealing with a title update following a death right now, a fixed-fee quote will give you a clear picture of the process and cost involved before you commit to a particular conveyancer.