How Do We Split Ownership If We Contribute Different Deposit Amounts? 

When buyers contribute different amounts towards a property purchase, it’s important that ownership reflects those contributions clearly. The most common way to do this is by buying the property as Tenants in Common. 

Unlike Joint Tenants, where ownership is always equal – Tenants in Common allows each buyer to own a defined share of the property. These shares can be split in any proportion you agree on, such as 60/40 or 75/25, depending on how much each person contributes to the deposit or ongoing mortgage payments. 

For a fuller comparison of these ownership structures, see our guide on the best ownership type for two buyers. 

Fixed vs floating share formulas 

To formally record this arrangement, a Declaration of Trust is put in place. Many buyers now opt for a floating share formula rather than a fixed percentage. While a fixed split remains static, a floating formula allows your ownership shares to adjust over time. This is particularly useful if one person pays for major renovations or makes larger mortgage overpayments later on, ensuring the final payout accurately reflects the total financial contribution. 

In the current digital conveyancing landscape, this legal document is essential for ensuring the Land Registry reflects your specific arrangement via a Form A Restriction. This confirms how the proceeds should be divided if the property is sold and prevents a single owner from selling without the other’s consent. 

For more on how this document works, see our guide on what a Declaration of Trust is and whether you need one. 

Protecting your investment 

A Declaration of Trust is particularly useful for unmarried couples, friends buying together, or situations where one buyer is receiving family help. It also provides the necessary legal evidence for HMRC if you need to split rental income or tax liabilities unequally. Without it, disputes can arise over ownership if the relationship breaks down or circumstances change. 

If you’re buying with a partner and want to ensure your contribution is protected, our guide on protecting your deposit if you break up explains the practical steps involved. 

Your conveyancing solicitor will prepare the Declaration of Trust alongside the purchase, ensuring it reflects your agreement accurately and is legally binding. Whether you choose a fixed split or a floating formula, putting this in place at the outset provides clarity and peace of mind for all parties involved. 

Final Thoughts 

If you’re contributing different deposit amounts, setting out ownership correctly from the outset is essential. Our conveyancing team at Setfords regularly advises buyers on Tenants in Common and prepares bespoke Declarations of Trust to ensure ownership reflects each person’s contribution, both now and in the future. 

Get your free conveyancing quote today. 

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