The two categories
Under the Property (Relationships) Act, all property falls into one of two categories:
Relationship property is shared equally (50/50) when the relationship ends.
Separate property remains with the partner who owns it.
The distinction is crucial. Categorising your property correctly determines what you would keep and what you would share if the relationship ended.
What is relationship property?
Relationship property includes:
- The family home — regardless of who bought it or whose name is on the title
- Family chattels — furniture, appliances, vehicles used by the family
- Property acquired during the relationship — investments, savings, other homes
- Income and earnings — salary, wages, business income earned during the relationship
- Superannuation and KiwiSaver — contributions made during the relationship
What is separate property?
Separate property includes:
- Property owned before the relationship — but only if kept separate
- Inheritances — received by one partner and kept separate
- Gifts from third parties — received by one partner personally
- Property acquired after separation
The key word is "kept separate." If separate property is mixed with relationship property, used for family purposes, or applied to the family home, its character can change.
But here is the catch
Separate property does not stay separate automatically. How you use it matters enormously.
How separate property becomes relationship property
This is where many people get caught out. Separate property can become relationship property through:
Intermingling. If you mix separate property with relationship property, it can lose its separate status. Put an inheritance into a joint account, and it may become relationship property.
Using it for the family home. If you use an inheritance to pay off the mortgage on your family home, that value will likely become part of the relationship property. The family home has special status under the Act.
Improvements from relationship property. If your separate property increases in value because of relationship property contributions (like renovating a property you owned before using relationship income), some of that increase will likely become relationship property.
"The way you manage your property during the relationship can determine its classification when the relationship ends. Understanding these rules now helps you make informed choices."
The family home is special
Even if one partner owned the home before the relationship, it becomes relationship property once you live in it together as your family home. This catches many people by surprise, especially those entering second relationships who already own a home.
Equal sharing is the starting point
The Act presumes that partners contribute equally to a relationship, regardless of their financial contributions. A partner who earns less or stays home to raise children is considered to have contributed equally.
At this stage, we analyse your specific property situation and explain what would be relationship property vs separate property in your circumstances.