Law Commission’s preferred approach to division of property on separation

Publication Date 
21 June 2019

In November 2018, the Law Commission published a second Issues Paper in its review of the Property (Relationships) Act 1976. The paper outlines the Commission’s preferred approach to reform of the Act and the recommendations it intends to make to the Government when it reports to the Minister in June 2019. The paper sets out a package of reforms designed to achieve a law that meets most New Zealander’s expectations of fairness when a couple separates.

Reflecting the widespread interest New Zealanders have in this law, the paper received significant media coverage, including an RNZ interview by Kathryn Ryan with the Law Commissioner leading the review, Helen McQueen and Auckland Family lawyer Jeremy Sutton, and an extensive article in The Listener by Donna Chisholm.

Key proposals in the paper include:

  1. The full value of the family home should no longer always be shared. Instead, if one partner owned the home before the relationship, only the increase in value during the relationship should be shared. The full value of homes acquired during the relationship would still be shared equally.
  2. People who have children, have been together for 10 years or more, or who have built or sacrificed careers because of the relationship should be eligible for Family Income Sharing Arrangements of “FISAs”. Under a FISA, the partners would be required to share their combined income for a limited period after they separate, to ensure the economic advantages and disadvantages of the relationship are shared more fairly.
  3. A court should have greater powers to share trust property when a trust holds property that was produced, preserved or enhanced by the relationship.
  4. Children’s best interests should be given greater priority under the PRA.
  5. A range of measures should be adopted to promote the just and efficient resolution of PRA matters and to address behaviour that causes delay and increases costs, including making sure proper disclosure of all relevant information is given. A comprehensive information guide for separating partners that explains the law and provides information about the different options available for resolving a dispute should be available.

The Law Commission received 100 submissions on its preferred approach. The Law Commission team is now completing its final report. It intends to give the final report to the Minister on 28 June 2019.

You can read more about the Commission’s preferred approach in the Issues Paper and its response to frequently asked questions.