Why Relationship Property Law Reform Is Still on Hold in New Zealand

In 2019, the New Zealand Law Commission released a landmark report recommending major reforms to the Property (Relationships) Act 1976 (PRA)—the key legislation governing how relationship property is divided when a couple separates. The review found the PRA no longer reflects the realities of modern relationships and recommended 140 changes to better balance fairness, protect children's interests, and address economic disparity.

Six years on, however, these reforms remain in legislative limbo. Why is it taking so long—and what exactly was recommended?

The Law Commission’s Key Recommendations

1. Reforming the Family Home Rule

Currently, the family home is shared equally upon separation, regardless of how or when it was acquired. The Law Commission proposed that only the increase in value of a pre-owned or gifted/inherited home during the relationship should be shared. This better reflects individual contributions and expectations, especially for shorter relationships.

2. Addressing Trusts

The increasing use of trusts to hold assets has created complexities in relationship property disputes. The Commission recommended that courts be given stronger powers to divide trust property if it was sustained or enhanced through the relationship—closing a long-standing legal loophole.

3. Family Income Sharing Arrangements (FISAs)

To address economic inequality that often arises post-separation (particularly when one partner gives up career progression to care for children), FISAs would require income sharing for a limited time after separation, helping both parties transition more equitably.

4. Prioritising Children's Interests

The Commission recommended changes to ensure that the best interests of children are better recognised in property decisions, including giving primary caregivers more secure rights to stay in the family home immediately after separation.

5. Improved Dispute Resolution

A more robust framework was proposed to reduce conflict and cost, including mandatory disclosure obligations and plain-language guides to help separating couples navigate the process without unnecessary litigation.

Why the Delay?

Despite widespread agreement on the need for reform, the Government has yet to act. The reasons are multi-faceted:

• Alignment with Succession Law Reform
• The Government decided not to proceed with PRA reform until after the Law Commission's ongoing review of succession law, to ensure consistency between property division on separation and on death.
• Complexity of Implementation
• The proposed reforms are extensive and would require substantial legislative drafting, public consultation, and policy development. This scope has contributed to the delay.
• Legislative Prioritisation
• With a full legislative agenda in recent years—including pandemic response and housing reform—relationship property law has not been prioritised.

Where To From Here?

While the recommendations remain on hold, the need for reform is only growing. In the meantime, couples entering or exiting relationships are urged to seek legal advice and consider Contracting Out Agreements (commonly known as "pre-nups") to help manage property expectations.

At DTI Lawyers, we continue to monitor developments and advise clients navigating relationship property matters. If you're starting or ending a relationship and want to understand your rights—or protect your assets—our specialist team is here to help.

For more information or legal assistance regarding Relationship Property, contact the team at DTI Lawyers on (07) 282 0174.