Joint Ownership of Property: Gains and Losses

Co-ownership is on the rise in the Ontario real estate market to buy houses on sale that are unaffordable for one buyer. It is a popular estate planning tool which is attracting new home buyers, especially young couples. Pooling their money to buy their dream home is surely a great idea of getting into the market and owning real estate. But there is so much more to joint ownership that buyers often forget to think about. That’s why considering the pros and cons of co-ownership is necessary to make an informed decision. Read on to find out what are the advantages and disadvantages of buying a house or condo in Ontario in joint ownership.

Co-Owning a Property: Pros and Cons


1) Increases Purchasing Power

Buying a property in co-ownership is the best solution for people who can’t afford to invest in an expensive property just by themselves. Contributing money to invest in a property not only increases your purchasing power but also save one partner from taking all the financial load.

2) Gives Full Right of Property to Each Owner

Joint-ownership is a great idea for homebuyers, especially couples who want to have full rights of property. With the right of survivorship, where if one owner dies his/her share passes to the other owner(s), each co-owner has the right to use and enjoy the property. Also, neither owner can do anything with the property without the other joining.

 Buying property in Ontario, Canada

3) Avoids Probate

The key advantage of co-owning a house or condo is that the property involved avoids probate. It is a process a legal court takes to conclude all your legal and financial matters after your death. Technically speaking, probate is the judicial process whereby a will is ‘proved’ in a court of law. The will is accepted as a valid public document and is considered as a testament of the deceased.

It is a time-consuming and expensive process. The probate fee in Ontario is $250 for the first $50,000 of your estate and $15 for each additional $1,000 with no upper limit. In the case of a joint-ownership, your co-owner is entitled to have the ownership after your death, thus ensuring a smooth transfer of the property without probate.

4) Offers Continuity

In most cases, when someone dies, his/her property is often seized by the state until the probate court determines who will get the ownership or how to distribute the property to the heirs. It creates a problem for the surviving spouse who has outstanding debts to be paid. However, the scenario is different in the case of co-ownership. As mentioned earlier, owning an asset with your partner avoids probate. It also means that the ownership is transferred to the survivor ensuring the succession of the property without hassle. The surviving spouse can use the property in any way he/she finds suitable as the ownership is transferred immediately upon the death of one owner.


1) Has the Potential for Conflict

When the couple decides to buy a house together, they both presumably plan to live there happily ever after. But what if the relations deteriorate? If you’re in an unstable relationship, investing in a jointly owned property is a disadvantage. For example, if you and your partner are going through marital problems and decide to get a divorce, what will happen to the house? If one tries to sell it, he/she needs the other partner to join in. That said, if the relationship ended on a bitter note and not mutually, it can create trouble in selling the property, thus making it a burden for both the partners.

2) Involves Risks

Since you jointly own the asset with your partner, his/her debt can leave you exposed to risks. For example, if your partner files bankruptcy or is sued, his/her creditors can force a sale of the property to pay off a debt. This is a possibility, especially if you’re both are business partners.

3) Lacks Freedom

As mentioned earlier, each owner has full right over the property. If one partner wants to make changes to the property, he/she needs permission from the other partner as they both have equal rights and control and it may happen that one wants to renovate but the other doesn’t. This sometimes can take away the freedom if both the partners do not agree on one thing.

The decision of joint ownership of a house entirely depends on your relationship with your partner, your financial health and what you want to achieve. If you and your partner are on the same page, co-ownership can be advantageous for you as you both can pool funds to achieve a common objective of buying your dream home. On the other hand, joint tenancy should be avoided if you don’t want to share the ownership with your partner whom you don’t trust. It is advisable to consider all the pros and cons before making the decision to avoid problems in the future. To get expert advice on home buying and selling, you can contact experience real estate agents in Ontario who can guide you from beginning to end.


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