Q: My girlfriend and I are planning to buy a house together. To raise a substantial deposit I am going to sell the starter home I bought ten years ago. As my girlfriend will contribute equally to the mortgage and household bills, will she have an equal right to the property if we ever split up?
A: It will largely depend on whether you own the property as joint tenants or as tenants in common. If you hold it as joint tenants and you split up, the starting point for the division of the property will be 50:50 as you will both own the whole of it.
If you are concerned about entitlement to a larger sum than your girlfriend, to reflect your larger financial input, there are measures you can put into place. You can log your greater interest in the property at the time of purchase and should look to own the property as tenants in common in unequal shares, whereby each of you would own a defined percentage of it. You could also sign a Declaration of Trust, which is something that is frequently recommended by solicitors in cases where there is an imbalance of initial contributions towards the purchase of a property.
Holding a property as tenants in common is becoming more popular, not just with young unmarried couples who purchase property together but also with older couples as part of their inheritance tax planning. If a couple own a property as tenants in common, either of them can pass on their share of the property in their Will, whilst allowing their partner or spouse to continue living at the property. The surviving partner’s share would be passed pursuant to their Will, or the rules of intestacy if there is no Will, on death.
(Article published 16/01/2017)