A lot of people assume the Property (Relationships) Act 1976 (the PRA) only applies to married couples. It doesn’t. If you’ve been living with a partner in New Zealand for three years or more, you’re likely in the same legal position as a married couple which means your property could be divided equally if you separate.
Here’s what that actually means in practice.
What counts as a de facto relationship?
Under the PRA, a de facto relationship is one where two people live together as a couple without being married or in a civil union. There is no single test. Consideration is given to the full picture including:
- how long you’ve lived together
- whether you have a sexual relationship
- how financially interdependent you are
- whether you own or use property together
- whether you have children together
- how you present as a couple publicly.
The three-year rule
Three years is the threshold that changes everything. Once you’ve been together for three years or more, the PRA’s equal sharing rules kick in. Relationship property – broadly, assets acquired during the relationship – is divided equally on separation, regardless of who paid for what or whose name is on the title.
If you’ve been together for less than three years, equal sharing doesn’t automatically apply. But the court can still make orders in limited circumstances, for example, where there’s a child of the relationship, or where one partner has made a contribution significant enough that ignoring it would be seriously unjust.
When does the clock start?
From the day you moved in together – not when you got engaged, not when you decided things were serious, and not from the wedding date if you later married. This catches a lot of people out. Three years and two months of living together means the PRA applies in full, regardless of what conversations you did or didn’t have.
What counts as relationship property?
The same rules apply to de facto couples as to married couples. Relationship property generally includes:
- the family home, regardless of whose name is on the title
- income earned during the relationship
- KiwiSaver contributions made while you were together
- assets bought using relationship income
- any increase in value of relationship property during the relationship.
Separate property – things you owned before the relationship or received as a gift or inheritance – generally stays yours. But it can lose that status over time if it becomes mixed up with relationship property.
What about keeping finances separate?
It doesn’t help, legally. The PRA doesn’t look at how you organised your bank accounts. It looks at when you acquired something and how it was used. Salary paid into your personal account during a three-year de facto relationship is relationship property. KiwiSaver contributions made during that time are relationship property. The investment you built from your own earnings five years in is very likely relationship property.
Can we agree on something different?
Yes. De facto partners can enter into a contracting out agreement at any point – before moving in together or during the relationship. For detail on how these work and what the requirements are, see deciding if you need a pre-nup and making sure your pre-nup holds up.
If you’re moving in with a partner and have assets you want to protect – for example, a property, savings, an inheritance or a business – get advice sooner rather than later. The earlier you put a contracting out agreement in place, the simpler the process is.
If you’re separating from a long-term de facto partner and aren’t sure where you stand, early legal advice matters. The law is well-settled but how it applies depends on your specific circumstances.
Talk to a de facto relationship lawyer in Auckland
Gabrielle Thompson is a Senior Associate at Lane Neave specialising in relationship property law, de facto relationships, contracting out agreements, and separation. Based in Auckland, she works with clients across New Zealand.
If you would like to discuss your situation, email Gabrielle or phone her on 021 811 526.
