Comment: The law on how to divide relationship property was radical social legislation when first enacted, but there is now widespread concern it is failing to deliver outcomes that align with modern society.
This year marks 50 years since the Matrimonial Property Act 1976 passed into law, and 25 years since the Act was amended to include de facto relationships and renamed the Property (Relationships) Act 1976 (PRA).
Generational, cultural and demographic shifts since the 1970s have affected parties’ expectations of their partnership and sharing of assets.
More people now partner and re-partner later in life than in previous generations and it is now highly likely that both partners will be in paid work and contributing financially to the family income and wealth accumulation.
The New Zealand Law Commission’s comprehensive report in 2019, incorporating 140 recommendations, concluded that, while fundamental aspects of the law remain sound, “the PRA is no longer fit for purpose for 21st century New Zealand”.
However, that report has not yet been actioned by two successive governments.
On July 3 2026, academics, judges from all benches, including Te Kooti Whenua Māori | Māori Land Court, senior members of the legal profession, Minister of Justice Paul Goldsmith, MPs from across the political spectrum, and policy makers, gathered in the Grand Hall of Parliament for a national conference to observe the 50th anniversary of the legislation and to consider the future of relationship property law in Aotearoa New Zealand.
We led the conference “Property (Relationships) Act 1976: 50 Years On” in collaboration with colleagues Professor Mark Henaghan from the University of Auckland and Professor Bill Atkin from Te Herenga Waka. The conference was made possible by funding from the Michael and Suzanne Borrin Foundation.
During a day of robust debate, key issues emerged that will help inform future projects on the reform and modernisation of the law. Conference attendees found common ground on several matters.
There was consensus that the PRA captures an appropriate range of relationships – spouses, civil union partners and de facto couples in qualifying relationships. There was also agreement that the default rule of equal division of property is well established, widely accepted as fair and should not be changed.
There was concern, however, that the ‘clean break’ approach was not working. While not expressed in the Act, the concept of a clean break – the idea that the parties end their relationship, take their share of the property and go their separate ways – has underpinned the operation of the legislation since its enactment.
Too much emphasis on a clean break can oversimplify the circumstances in which many people find themselves after separation and can lead to unfair outcomes, especially when there are children involved.
The central question is what property should be shared, and views are divided on this question. The status of the family home, most couples’ main asset, is a contentious issue. After public consultation, the Law Commission recommends abolishing the current rule that the home is shared equally whenever and howsoever acquired.
Instead, it suggests that a home brought into the relationship by one of the partners or as a gift or inheritance, should remain that partner’s separate property and should not be shared on separation, although increases in the home’s value during the relationship would be shared.
However, if the home were replaced during the relationship, the new property would become relationship property. The proposal protects bricks and mortar, but not value. This could take property owners by surprise and result in unanticipated losses. Any reform of relationship property law will need to pay careful attention to the part played by the family home in property division.
Trusts have undermined the policy of the Act by placing assets that would be relationship property beyond the reach of the Act. Existing remedies in the Act have failed to address the resulting unfairness. The Law Commission has recommended a comprehensive trust-busting remedy. Views on whether that remedy would be effective and fair were divided.
The Act’s equal sharing regime applies unless the parties formally contract out of the Act after each party has received independent legal advice. Several concerns were raised about these agreements.
Many couples are unaware that informal agreements are not valid and the cost of obtaining independent legal advice can be an obstacle. Even valid agreements can be set aside if they are found to be seriously unjust. As the purpose of contracting out agreements is usually to protect pre-relationship assets, getting the classification of assets right is the key issue.
A further matter identified as needing reform is the problem of redressing economic disparity between partners after separation. Issues of economic disparity are complex and often contested, undermining the Act’s goal of a speedy resolution of disputes. It is widely accepted that this matter needs to be addressed. The Law Commission’s proposal to introduce Family Income Sharing Arrangements is one way to achieve simplification.
An important theme of the conference was the near total absence of cultural perspectives in the Act. Other than recognising taonga as special chattels and excluding Māori land from the reach of the Act, the legislation fails to take account of the country’s increasing diversity.
Māori, Pacific and Asian populations have each more than doubled since 1976 and their approaches to family formation, property ownership and division, and inter-generational expectations often differ from New Zealanders of European descent.
Explanations from presenters on these cultural perspectives made attendees realise that the Act was not meeting their needs and that any future reform of the legislation must put much thought into accommodating the differing cultural perspectives of a significant proportion of New Zealanders.
The Minister of Justice announced at the National Conference that new property relationship legislation would be part of a National government’s justice agenda if it were re-elected.
We implore all other major political parties to likewise prioritise this urgent law reform if elected – the Law Commission’s report is too important to put aside for another electoral cycle.
