When two or more people buy a property together in New Zealand, a decision gets made early in the process that most buyers barely notice, and that decision can matter far more than the price they negotiate.

Under the Land Transfer Act 2017, co-owners are registered as joint tenants by default unless they specifically ask for something else. Most conveyancers will raise it. Not all buyers take it seriously. They should.

Two very different ways to own the same house

As joint tenants, each owner holds the whole property together, with no defined or separate share. The defining feature is the right of survivorship. When one joint tenant dies, their interest passes automatically to the surviving owner or owners, regardless of what their will says. A will cannot override it. For couples who simply want the survivor to end up with the whole property, this is often exactly what they want, and it avoids the property being tied up in probate.

As tenants in common, each owner holds a defined share, commonly equal but not necessarily so. That share does not pass automatically to the other owner. It forms part of the deceased's estate and is distributed according to their will, or, if they have not made one, under the Administration Act 1969. This structure suits people who want to leave their share of a property to someone other than their co-owner, which comes up constantly in blended families, where a parent wants their share to eventually reach their own children rather than a stepfamily.

The blended family trap

This is where the joint tenancy default causes real damage. A parent who remarries and buys a new home as joint tenants with their new partner may believe their will still controls what happens to their share. It does not.

On their death, their entire interest in that property passes to the surviving partner, and the children from the first relationship may receive nothing from it, no matter what the will says. This is not a rare edge case. It is one of the most common and avoidable estate planning mistakes we see, and it is entirely preventable with the right ownership structure chosen at the outset, or corrected later.

Severing a joint tenancy

If a joint tenancy no longer reflects a couple's wishes, whether due to separation, remarriage, or simply a change of mind, it can be severed and converted to a tenancy in common. Under section 48 of the Land Transfer Act 2017, this is done by one owner transferring their interest to themselves as a tenant in common, registered through Land Information New Zealand. In many cases this can be done unilaterally, without the other owner's agreement, which is precisely why it matters to act early if a relationship is breaking down. Separated couples who leave an old joint tenancy in place risk an outcome neither of them intended if one of them dies before the property is formally settled between them.

The subsidy question nobody raises at settlement

There is a further consideration that is very New Zealand-specific and rarely discussed at the time of purchase. If a surviving owner later requires long-term residential care, the Ministry of Social Development applies an asset test to determine eligibility for the Residential Care Subsidy. Held as joint tenants, the survivor's full interest in the property counts toward that test, since the whole property is now theirs. Held as tenants in common, only the survivor's own share is counted, because the deceased's share sits separately in their estate. For some families, this difference determines whether a parent qualifies for subsidised care or must fund it privately. The asset thresholds are reviewed periodically by MSD, so anyone weighing this up should confirm the current figures.

The takeaway

This is not a decision to leave to a tick-box moment during settlement. It deserves the same attention as the price negotiation itself, and it deserves revisiting whenever circumstances change: a new relationship, a blended family, a separation, or simply getting older. A conversation with a lawyer before signing, or a review of an existing title years later, costs very little compared to what an overlooked joint tenancy can quietly take away from the people you meant to provide for.