Joint tenancy and tenancy-in-common
Joint Tenancy
If you hold title with someone else as joint tenants, this means each of you has a right of survivorship. If any individual owner dies, the surviving joint tenants immediately split the deceased person’s equity equally amongst themselves. The surviving owners must register a survivorship application on title to update the ownership, but there is no need to probate (a procedure to give a person the authority to act as the trustee of an estate) the deceased person’s last will or pay any taxes.
This is typically the best choice for married or common-law couples who plan to leave their equity in the home to their spouse upon their deaths. It eliminates the need to apply for probate or pay the estate administration tax before title can be transferred.
This option is not ideal for business partners with dependents, since ownership is not preserved in the deceased person’s estate, and the beneficiaries of the estate do not benefit.
A few additional things to note:
A joint tenancy is always an equal division between the parties - you cannot split a property 70/30 as joint tenants, or 80/10/10.
You can always sever a joint tenancy - meaning you can change the ownership to tenancy-in-common - and you do not require the consent of the co-owners to do so.
Tenancy-In-Common
A tenancy-in-common allows multiple owners to split equity into whatever shares they choose - 50/50, or 80/20, or 99/1 - and allows deceased owners to retain their ownership in their estate for the benefit of their heirs.
It is important to note that owning a property as a tenant-in-common typically means you should prepare a last will and testament to designate the beneficiary of your property, and your estate will likely have to pay tax on the value of your share.
If your intent is to leave your share of the property to your co-owner, you should certainly consider joint tenancy instead. Tenancy-in-common is more appropriate for people who are entering a common business venture, for people who want their ownership shares to reflect the differences in their contributions to the purchase price, or for couples who want to maintain financial independence from one another.
A few additional things to note:
Tenancy-in-common can be used to minimize capital gains taxes where one co-owner does not occupy the property as a principal residence. For example, a first-time homebuyer may require a parent to join them on title in order to qualify for a mortgage. The child, who occupies the property, can hold title as a 99% owner, and the parent can hold title as a 1% owner. When the time comes to sell the property, the child would be exempt from capital gains tax, while the parent would be responsible for capital gains tax on only 1% of the value of the property.