Relationship Property
Property that is subject to equal sharing between partners under New Zealand's Property (Relationships) Act 1976 (PRA) when a relationship ends.
What is a Relationship Property?
Under New Zealand's Property (Relationships) Act 1976, most property acquired during a marriage, civil union, or de facto relationship of three or more years is classified as relationship property and is generally divided equally if the relationship ends. This includes the family home, regardless of whose name is on the title or who paid for it.
Relationship property includes the family home and chattels, any property acquired by either partner during the relationship, and the increase in value of any separate property during the relationship. Separate property (property owned before the relationship, or inherited/gifted to one partner specifically) may remain separate, but the rules are complex.
If you're buying property while in a relationship, or buying with someone who is in a relationship, it's important to understand how the PRA might apply. A contracting-out agreement (sometimes called a prenup or relationship property agreement) can vary the default equal-sharing rules, but both parties need independent legal advice.
Why It Matters for Due Diligence
When buying property, consider your relationship status and how the PRA might apply. If you're contributing unequal deposits (for example, one partner has more savings), consider a contracting-out agreement to protect each partner's contribution.
If you're buying a property from a couple who are separating, be aware that both partners may need to consent to the sale. Your lawyer should ensure the sale is properly authorised by all parties with an interest in the property.
How to Check
Discuss relationship property implications with your lawyer before purchasing. If you're buying with a partner and want to protect unequal contributions, ask your lawyer about a contracting-out agreement under the PRA. Both partners need their own independent lawyer for this agreement to be valid.
Frequently Asked Questions
Is the family home always split 50/50?
Under the PRA, the family home is generally relationship property and subject to equal sharing, regardless of whose name is on the title. Exceptions exist for short relationships (under 3 years) or where a valid contracting-out agreement is in place.
Do I need a contracting-out agreement?
If you and your partner are contributing unequally to a property purchase, or if you want to protect assets you're bringing into the relationship, a contracting-out agreement is worth discussing with your lawyer. Both parties need independent legal advice for it to be valid.
Related Terms
Sale and Purchase Agreement
GlossaryThe legally binding contract between buyer and seller that sets out all the terms and conditions for a property transaction in New Zealand.
Settlement
GlossaryThe day ownership of a property officially transfers from the seller to the buyer and the purchase price is paid in full.
Registered Interest
GlossaryAny right or claim recorded on the property's certificate of title, such as a mortgage, easement, covenant, or caveat.
Mortgage
GlossaryA loan from a bank or lender secured against the property, giving the lender the right to sell the property if the borrower defaults on repayments.
Caveat
GlossaryA legal notice registered on a property's certificate of title warning that someone claims an interest in the property.
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