Outdated rules on the family home create real risk for separating couples and their advisers
New Zealand's relationship property legislation is half a century old and no longer fit for purpose — and legal experts are taking that argument directly to Parliament.
University of Otago law researchers are leading a national conference at Parliament this month, calling for urgent reform of the Property (Relationships) Act 1976, which the Law Commission declared unfit for purpose following a review completed in 2019.
The core problem is structural. Under the current act, the family home is classified as relationship property regardless of when it was acquired or who paid for it — meaning a partner who owned and fully funded a home before the relationship began may be required to share it equally on separation.
"The family home is classified as relationship property, even if it was owned and fully paid for by one of the partners before the relationship began, which is now seen as unfair," said Professor Nicola Peart, one of the conference's lead researchers, in a media release.
Second relationships and blended families most exposed
While the act has served relatively well for couples who built their assets together over the course of a relationship, it creates significant complications for those entering second partnerships with existing property or substantial pre-relationship assets. Contracting out of the act is possible but practically difficult — independent legal advice is required, and the non-owning partner is typically advised against signing away an entitlement to a half share.
Professor Nicola Taylor noted that New Zealand society has shifted profoundly since 1976.
"More relationships end in separation, and re-partnering is more common. New Zealand is also more ethnically diverse and our population is aging," Taylor said, adding that these trends are "intensifying."
According to Stats NZ's most recent release, 7,887 divorces were granted in 2025 — up 5% on 2024 — and the number of marriages recorded was the lowest since 1953, excluding pandemic years. Around one-third of marriages end in divorce within 25 years.
No government action yet — but pressure is building
The Law Commission's 2019 report recommended repealing the act entirely and replacing it with new legislation. Its 140 recommendations have so far gone unaddressed.
Peart acknowledged the scale of the task.
"In the current climate of uncertainty and the state of the economy, there appears to be little political will to act on the Law Commission's recommendations," she said. "We hope that by holding this conference in the Beehive that Parliament will be persuaded to take action."
For NZ mortgage advisers, the current law creates practical complications when advising clients on property structures, security arrangements, and lending decisions. For clients entering second relationships with existing property, or couples whose home was owned outright before the relationship began, the gap between what clients assume the law does and what it actually does is wider than most expect — and until reform arrives, directing those clients to independent legal advice remains the most important step an adviser can take.
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