1. To me, a joint tenancy sounds better than a tenancy in common in the sense that if 1 person was to pass away - it gets left to the other person. I've been told that tenancy in common is much more common for non married couples - but I just don't understand why. Am I missing something? Is there downsides that I'm not seeing with going with joint tenancy?
If you're object is to ensure that your share in the property goes to your partner, you don't need a joint tenancy to ensure that. You can have a tenancy in common, and make a will leaving your share to your partner. (As an unmarried couple you should
absolutely definitely both be making wills anyway, so making a will isn't an extra expense that will be forced on you by having a tenancy in common.)
If you do have a joint tenancy then your share goes to your partner on your death (or vice versa) and you have no choice about that. So if you split up at some point, a joint tenancy isn't going to be the most suitable arrangement. If the split is amicable or at least civilised you can sort that out by agreement, and make arrangements that suit your new circumstances, but if it's confrontational the fact that you have a joint tenancy could be a factor that adds to the mess — one more thing to argue about.
The other point to bear in mind is that with a joint tenancy ownership is always 50/50. You mention in the OP that one person will be paying a substantial deposit. The fact that you mention it suggests, maybe, that you may think, or your partner may think, that your respective shares in the house should be proportional to your respective contributions to the cost of purchase. If you want the house to be owned in unequal shares then tenancy in common is your only option — you can have a 60/40 tenancy in common, or 55/45, or whatever you want.
2. I'm aware of the fact that if one person passes away, the other will have a big tax bill. From what I know after 3 years this shouldn't be the case thanks to the "Dwelling House Exemption"? Is that correct?
As Clubman says, yes, as long as the quallifying conditions are met. But they are quite restrictive, especially the requirement to continue living the house for six years after the death, which when the time comes might not suit your life plans. Far be it from me every to tell anybody to get married for tax reasons, but if you are someone who would consider marrying for tax reasons, this would be a tax reason to marry for.
(And if you or your partner have or hopes in the future to have any
other property that you would intend to leave to one another, that might be a further tax reason to marry for.)
3. Is there any way to protect the deposit, or is that more or less pointless after 5 years because of the "Civil Partnership and Certain Rights and Obligations of Cohabitants Act 2010". I'm not sure if this is even possible on a joint tenancy either!?
It's not pointless at all. If you split up after 5 years the court
can divide up your assets any way it likes, it's not automatic that the court will always impose a 50/50 split. The court has to consider all the relevant facts and circumstances, and if the two of you have an agreement about your respective interests in the house that's a highly relevant fact and circumstance which the court will take into account.
(Having said that, the longer your relationship has continued and the more your financial circumstances have become intertwined, the more other factors there would be for the court to take into account. If, by the time you have split up, you have four dependent children and one of you quit work some years previously to care for them, the court's not going to make that partner, and the kids, homeless because of an agreement that the other partner owns 60% of the house.)
Plus, you shouldn't assume that if you break up it will be bitter and acrimonious and will end up in a contested hearing in the courts. You may able to work out agreed separation terms. And the chances of your being able to do that, in relation to the house, are probably improved if you already have an agreement about your respective stakes in the house.
So if Partner A is putting up, say, €100,000, representing 20% of the purchase price, and the other 80% will be financed with a mortage, the payments on which will be shared equally, you could agree:
- A owns 60% of the property, and B owns 40%; or
- A gets the first €100,00 of any sale proceeds, adjusted up or down in line with the rise or fall of the house price during the period of ownership, and the rest is split 50/50; or
- . . . whatever else you may agree.
almost poetic!