Buying Property Together
Published on April 18, 2025 | 4 Minute read
Melanie
Ortiz Reyes
Content Specialist
Taking the plunge to buy property with your significant other? It’s one of the largest financial commitments you'll make together. Beyond the thrill of house hunting and planning your future home, there are legal and financial factors to consider. Here’s what you need to know before signing on the dotted line together.
Ownership Structures and Legal Protections
It matters how you hold title when buying a property with a partner. Your ownership structure affects everything from tax implications to what happens if one person passes away.
Joint Tenancy
Joint tenancy creates equal ownership between partners with the right of survivorship. This means:
- Both parties own an equal share of the property
- If one owner dies, their share automatically transfers to the surviving owner
- Both owners have equal rights to the property during their lifetime
- Either owner can sell their interest, which converts the ownership to tenants in common
This option is popular among married couples and long-term partners who want to ensure the property passes smoothly to the surviving partner.
Tenants in Common
Tenants in common allows for unequal ownership percentages and doesn't include automatic rights of survivorship:
- Each owner can hold different percentage interests in the property
- Owners can transfer their share to anyone in their will
- Ownership interests can be sold independently
- Great for partners contributing unequal amounts to the purchase
This arrangement offers flexibility but requires clear documentation of each person's ownership percentage.
Creating a Property Agreement
Whether married or unmarried, a written property agreement is imperative. This document outlines rights and responsibilities while providing a framework for resolving potential disputes.
A complete property agreement should address:
1. Initial financial contributions from each partner
2. Ongoing responsibility for mortgage payments and maintenance costs
3. Decision-making processes for renovations or improvements
4. Exit strategy if the relationship ends or one person wants to sell
5. Buyout provisions if one partner wishes to keep the property
Homeownership creates a financial entanglement that can outlast a relationship. A clear agreement drafted with legal assistance protects both parties and provides clarity during difficult times.
Financial Planning and Transparency
Buying property together requires financial honesty and thorough preparation. Before house hunting, have candid conversations about your complete financial picture.
Credit Profiles and Mortgage Readiness
Your combined credit profile affects your loan approval and interest rates. Discuss:
- Current credit scores and any issues that might impact your application
- Outstanding debts and payment plans
- Previous bankruptcies or foreclosures
Many couples are surprised when one partner's credit history complicates the mortgage process. Getting pre-approved together provides clarity before emotional attachment to any property occurs.
Tax Considerations and Asset Protection
Homeownership brings both tax implications and the need for asset protection strategies that vary based on your relationship status and ownership structure.
Tax Benefits and Liabilities
For married couples filing jointly, mortgage interest can be deducted on loans up to $750,000 (or $375,000 if married filing separately). Property tax deductions are also available, though subject to the $10,000 SALT cap.
Unmarried partners face more complex tax situations:
- Only one partner can claim the mortgage interest deduction
- Partners must decide who claims property tax deductions
- May need to file additional documentation showing how payments are divided
Working with a tax professional early in the process helps optimize your tax situation and avoid unexpected liabilities.
Protecting Your Investment
Life is unpredictable, making protection planning essential when buying property together.
Beyond standard homeowners insurance, consider:
- Life insurance policies naming each other as beneficiaries to cover the mortgage if one partner dies
- Disability insurance to protect mortgage payments if one partner becomes unable to work
- Umbrella policies for additional liability protection
Estate planning ensures your wishes are honored regarding the property. Key documents include:
- Wills specifying property distribution
- Powers of attorney for financial and healthcare decisions
- Living wills outlining end-of-life care preferences
- Trust arrangements if appropriate for your situation
Even young, healthy couples benefit from these documents, as they provide guidance during unexpected circumstances.
Building a Successful Co-Ownership Foundation
Perhaps the most important element in successfully buying property with a partner is maintaining open, honest communication. Schedule regular financial check-ins to review property expenses, discuss any concerns, and adjust plans as needed.
Many successful homeowning couples establish a dedicated joint account for property expenses while maintaining individual accounts for personal spending. This creates transparency while preserving financial independence.
Remember that purchasing property together is both a financial and emotional commitment. Taking time to address legal and financial considerations strengthens your partnership and protects your shared investment for years to come.