New Zealand has changed significantly over the last half-century. The Property (Relationships) Act 1976 was drafted at a time when couples generally married young and pooled their resources to buy a house as early as they could, a time when ABBA’s ‘Fernando’ topped the national charts and Fred Dagg and Footrot Flats made Kiwis laugh out loud.

Our rampant housing market, online dating and cheaper travel opportunities have changed how people engage with one another and when they settle down. The majority of people now wait until much later in life to commit to a relationship.

That means more instances of people bringing assets, property or financial savings into a relationship and can also mean greater disparity in wealth and earning power between partners.

As a result, a review of the Property (Relationships) Act was long overdue. The NZ Law Commission recently recommended changes to the Act to make the law fairer for partners dividing property and finances at the end of a relationship.

Under the current law, the family home automatically becomes relationship property. That means, if the couple separates, the original homeowner is forced to divide the property equally with their ex even if one of the parties owned the home prior to their relationship. A change to this ruling means that only the increase in the value of the property, while it is being used as a family home during the relationship, will have to be divided between the partners.

Another major alteration being proposed is to introduce Family Income Sharing Arrangements (FISAs) requiring individuals with high earning power or personal savings to share income for a limited period following separation from their former partner. 

Children’s interests are also a focus to make sure they are given greater priority and administrative changes designed to streamline the process has also been proposed. 

The coming changes should ensure more support for financially vulnerable individuals and a much fairer system for all. 

Feedback, comments and questions are always welcomed – please feel free to e-mail me on [email protected].

T: 03 443 0900

W: www.aspiringlaw.co.nz

Gillian Stuart is Aspiring Law’s Family Law specialist.

Please remember, this information is designed as a general guide, and should not replace specific legal advice on a particular issue.