Whether you are about to become a homeowner or already own a property in Singapore, you may want to understand holding your property as a Joint Tenancy or a Tenancy-In-Common.
Immovable property in Singapore (with houses being the most common example) can be held in two ways. You must decide on the manner of holding when you purchase or transfer ownership, and this will be reflected in the Singapore Land Authority (SLA) registry.
This article will cover:
• What is Joint Tenancy
• What is Tenancy-In-Common
• Joint Tenancy vs. Tenancy-In-Common: Pros, Cons, and which form you should choose
• Whether your manner of holding the property affects who pays the mortgage (if any)
• Whether a joint tenant/tenant-in-common can evict the other from the property
• How to check your property’s manner of holding
• How to change your property’s manner of holding in Singapore
• What you can do if you want to change the manner of holding, but the other co-owner refuses
Table of Contents
What is Joint Tenancy?
In a joint tenancy, the co-owners each have an entire interest in the property. This means that if you and your partner own a property as joint tenants, both you and your partner will each own 100% of the property. There are no separate shares.
What is Tenancy-In-Common?
In contrast to a joint tenancy, tenants-in-common own the same property in defined, separate shares. Your manner of holding does not have to be 50-50, with tenants-in-common owning unequal shares. For example, as a property owner, you can choose to own 99% of the property while your co-owner holds the remaining 1%.
Joint Tenancy vs. Tenancy-In-Common: Pros, Cons, and Which You Should Choose
Right of Survivorship
When holding a property under a joint tenancy, the Right of Survivorship applies. This means that if one co-owner dies, the surviving co-owner automatically acquires sole ownership of the entire property. This is regardless of whether the deceased co-owner left a will stating who their property should go to upon their death, and whether they wanted the surviving joint tenant to inherit the property in the first place.
On the other hand, the Right of Survivorship does not apply to properties held as tenants-in-common. This is because each tenant holds the property in separate and distinct shares. If one of the property owners dies, the surviving co-owner will only be entitled to his or her percentage share in the property (which they already own).
The portion owned by the deceased co-owner will go to their estate and be distributed according to their will or, if the deceased tenant did not write a will, the Intestate Succession Act (ISA). If the deceased co-owner is Muslim, the distribution of the estate will be governed by the Administration of Muslim Law Act (AMLA).
Facilitates “Decoupling”
If you and your spouse already own a residential property and both of you intend to purchase a second residential property, holding the first property as tenants-in-common can potentially avoid or reduce the Additional Buyer’s Stamp Duty (ABSD) on the second home. This is achieved through decoupling and part-purchase of the first property’s ownership.
Decoupling refers to removing one spouse from the ownership of the first property and then transferring that spouse’s share to the other (who will then become the sole owner). Part-purchase, on the other hand, is when one spouse buys all the shares owned by the other in the first property.
After decoupling or part-purchase occurs, the spouse who no longer owns the first property can purchase the second property entirely in their own name, which will be considered their first property. As a result, the couple can save on ABSD, as Singapore citizens do not have to pay ABSD for their first property, and for Singapore Permanent Residents (PRs), the ABSD for their first property is reduced to 5%.
However, for decoupling and part-purchase to be possible, the property must be held as tenants-in-common. By doing so, both spouses will hold distinct, separate shares of the property, which can be transferred or sold from one spouse to the other, making the property owned solely by one spouse.
Tenants-in-common holding the property in a 99-1 split can also benefit from reduced Buyer’s Stamp Duty. This is because during the decoupling process, when the 1% share is transferred to the buyer, that party will only pay stamp duty on that 1% share (as opposed to a higher percentage share, like 50%, if the parties had chosen an equal split).
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Purpose of Buying the Property
A joint tenancy may be more advantageous for couples purchasing a marital home to live in for the rest of their lives. This is because upon the death of one of the co-owners, the right of survivorship will apply, and the property will automatically belong to the surviving co-owner. This principle applies even if the deceased did not draft a will bequeathing the property to the surviving co-owner.
However, a disadvantage of the right of survivorship is that a spouse cannot transfer their share of the property to a non-owner (e.g., their children). On the other hand, in a tenancy-in-common, the deceased co-owner’s share in the residential property can be distributed through a valid will, the ISA, or the AMLA (if the deceased was Muslim). The person who receives such inherited property is also generally not required to pay stamp duty.
If you are buying a property for investment purposes (e.g., selling your share for a profit or renting out your property), it would be wiser to hold your property as tenants-in-common, so each owner holds a specific share of the property. This allows each owner to have liquidity in their held property, meaning each owner can sell his or her share of the property without involving the other co-owners.
Does Your Manner of Holding Affect Who Pays the Mortgage (If Any)?
The manner of holding has little effect on the housing loan, as the repayment of the loan is the joint and several liability of the mortgagors/borrowers.
The manner of holding also does not affect who pays the housing loan. This is because the loan agreement is a private agreement between the lender and the borrowers, as well as an agreement between the different co-owners about who pays and how much. Therefore, the manner of holding is not very relevant to who is responsible for the mortgage.
Can a Joint Tenant/Tenant-In-Common Evict the Other from the Property?
As a co-owner, whether in a joint tenancy or a tenancy-in-common, you generally cannot evict the other co-owners because they have the right to remain on the property.
However, if a co-owner is abusive, it is possible to evict them from the entire shared home or specific parts of it. Under section 65 of the Women’s Charter, if the court deems it necessary for the safety of the abused person, the court can grant that person exclusive possession of the whole or part of the shared property. This means the person will have the right to exclude the abuser from the property, even if he or she is a joint tenant or tenant-in-common.
However, to obtain exclusive possession, the abused person must first apply for a Personal Protection Order (PPO) / Domestic Exclusion Order (DEO). PPOs and DEOs are court orders that an applicant can apply for to protect themselves from family violence. Generally, a PPO restricts the abuser from committing family violence against the applicant, while a DEO can prohibit the abuser from entering the property where the family resides (which can be the entire property or just certain parts of it).
Separately, as a co-owner of a property, whether through a joint tenancy or a tenancy-in-common, you generally have the right to evict non-owners from the property. However, this is subject to their equitable interest in the property (for married couples) or their right to occupy and use the property. Additionally, you may not evict your child who is under 21 years old, as you are legally required to support him or her.
How to Check Your Property’s Manner of Holding?
If you own an HDB flat, you can check your manner of holding by logging into My HDBPage.
For private residential properties, you can pay a fee of S$5.25 for “Property Ownership Information” on INLIS to get information about how your property is held.
How to Change Your Property’s Manner of Holding in Singapore?
For both HDB flats and private properties, you should note that:
• Tenants-in-common must hold the property in a 50-50 share to convert their holding to a joint tenancy. If you and your co-owner own the property in unequal shares, the co-owner with the larger share will need to transfer their share to the other co-owner to achieve a 50-50 split.
• If you need to transfer a share to one party to equalize your shares, you may incur Seller’s Stamp Duty (SSD).
• When accepting a share from another co-owner, the receiving co-owner will also need to pay Buyer’s Stamp Duty (BSD).
Additionally, if the property has a bank mortgage, you may need to get the bank’s consent to convert the property’s manner of holding.
If Your Property is an HDB Flat
For HDB flats, you can change the manner of holding from a joint tenancy to a tenancy-in-common, and vice versa. After declaring the market value of your unit in the HDB application form (mentioned in the next paragraph), you can also change your holding from a tenancy-in-common with unequal shares to a joint tenancy, and vice versa, or change the shares of a tenancy-in-common.
The application form to change the manner of holding or the share proportion can be obtained from any HDB branch, or you can download it from the Housing & Development Board’s website. A non-refundable administrative fee of S$50 is payable upon submission of the form. You can appoint a conveyancing lawyer to represent you in this transaction or engage HDB’s own lawyers for this procedure.
If Your Property is a Private Residence
For private properties (including condominium units), the conversion of the manner of holding is done by submitting and registering the relevant declaration documents with the Singapore Land Authority.
The existing co-owners (whether joint tenants or tenants-in-common) must sign a declaration (a statutory declaration) before a Commissioner for Oaths, stating their intention to hold the property as joint tenants or tenants-in-common. If all tenants agree to the conversion, they will sign the same form for submission.
A change in the manner of holding may require you to transfer part of your interest in the property to the other tenants, and this transfer is also subject to stamp duty. You may wish to engage a property conveyancing lawyer to assist you with the documentary transaction and ensure that the appropriate stamp duties are paid.
What Can You Do If You Want to Change the Manner of Holding, But the Other Co-Owner Refuses?
If a joint tenant wishes to change the manner of holding to a tenancy-in-common, but the other joint tenants are unwilling to do so, the willing joint tenant must sign a declaration stating his or her intention to change the holding to a tenancy-in-common. The same applies to tenants-in-common who intend to change their holding to a joint tenancy, although they must first hold the property in equal shares.
The declaration instrument must then be formally served on the other unwilling joint tenants by a lawyer. As the procedures and steps to be taken thereafter can be complex, it is advisable to consult a conveyancing lawyer.
Conclusion
Choosing the right manner of holding a property is important, as it can affect any future housing plans (or changes to those plans), such as decoupling. Changing the manner of holding later on is also a hassle. Therefore, you should carefully consider which form of holding is best for your situation, especially if you intend to purchase a new property.
In summary, a joint tenancy involves the right of survivorship, meaning it may be more suitable for co-owners who wish to purchase a marital home for the rest of their lives, as the property will automatically belong to the surviving co-owner. Alternatively, if you plan to decouple your property or use it for investment purposes, holding the property as tenants-in-common may be more advantageous for you. However, please note that any transfer of property shares may be subject to applicable stamp duties.
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