Property & its Division

Property and the Act
This topic is covered by the Property (Relationships) Act 1976 which has made major changes to the Matrimonial Property Act 1976. The new act applies to couples in de facto relationships, including same-sex couples, as well as married couples.

As a general rule, you and your partner are each entitled to half of all the relationship property that is all the assets that you have acquired during your relationship.

There are, however, many special rules, for instance about:

  • relationships of less than three years’ duration;
  • separate property;
  • contributions made (eg, household duties, childcare);
  • debts and creditors;
  • contracting out of the act’s provisions;
  • your rights if your partner dies.

This is an area in which you should seek legal advice.

When you separate, only a written agreement prepared and certified by a lawyer for each of you has legal status. If you have children and own a house you may want to consider agreeing that the parent with custody lives in the house until the children are older. If so, there needs to be clear agreement about who will pay the mortgage, rates, insurance and maintenance costs.

If you can’t agree on the division of your property, either of you can apply to the court for orders in relation to the property. Because the act says that you both own your property, you must not sell or remove assets (such as furniture, appliances or vehicles) without the consent of your partner or a court order.

You should always review the content of your will as your personal circumstances change.
Separation does not necessarily affect your will but divorce does. The new Property (Relationships) Act could also affect your will.

Property includes both tangible items such as houses, cars, furniture, jewellery, money, household equipment, etc, and also intangible items such as an interest in a business partnership, fishing quota, a future benefit in a superannuation scheme, etc.

All property that both partners own, no matter when it was acquired (before, during or after the end of a relationship) has to be considered and classified and must be disclosed to the other partner.

What is Relationship Property?
Relationship property includes:

  • the family home even if it was acquired by one partner before the relationship began or by inheritance, gift or via a trust. The only exception is if it is on Maori land;

  • the family chattels (furniture, fittings, household equipment and appliances, vehicles, boats, etc) even if they are in one person’s name only (but see “separate property” below);

  • any common or jointly-owned property; property acquired before the relationship began if it was intended for the couple’s common use or benefit; all earned income and property bought after the relationship began;

  • the value added during the relationship to superannuation and life insurance policies.

  • debts incurred to acquire, improve or maintain relationship property (eg, a bank loan to renovate a house);

  • those incurred to manage the affairs of the household (e.g, purchases of household items, holidays, car etc);

  • those incurred for the purpose of bringing up a child of the relationship. Personal debts are those incurred to acquire or improve separate property or those incurred before the relationship began or after it ended.

Even though a debt may be in one partner’s name only (say on one partner’s credit card), that does not mean it is a personal debt - it will depend on the purposes for which it was incurred. In some circumstances a student loan may be classified as a relationship debt depending on what it was used for (e.g, joint living costs).

Some debts (e.g. a bank overdraft) may be partly relationship debts and partly personal debts.
Compensation may be awarded where relationship property has been used to pay a personal debt in the past.