The UK is consulting on reforms to protect cohabiting couples on separation, but New Zealand's own Law Commission proposals to change how relationship property is divided have been on hold for years.
New Zealand de facto couples who have been together three years or more have the same rights to share relationship property on separation as married couples — but proposed reforms to those rules have been gathering dust for years while the government works through other priorities.
De facto relationships are defined broadly under New Zealand law, and the three-year threshold is not the only criterion — the quality and nature of the relationship also matters.
The contrast is sharp: the United Kingdom has just opened consultation on changes that would make the separation process less financially difficult for people who live together without marrying. In New Zealand, de facto couples who have lived together for three or more years are generally entitled to share relationship property if the relationship ends or someone dies — the same starting point as married couples.
University of Otago law professor Nicola Peart said the key difference was in the starting point. In the UK, the proposal was that each cohabitant would keep their own property by default, with courts adjusting only where individual needs required it. In New Zealand, the default is equal sharing — and the debate is not about whether to share, but what property falls into the pool to be divided.
What the Law Commission proposed
The Law Commission previously recommended changes that would have altered how the family home is treated on separation. Rather than an automatic 50/50 split, the proposal was that if one partner owned the home before the relationship began, only the increase in value during the relationship would be shared — not the full value.
It also proposed family income sharing arrangements and giving children's best interests more priority in relationship property decisions.
Those recommendations were put on hold while a succession law review was carried out. The government said it accepted in principle that reform was needed, but the Ministry of Justice would first need to consider the recommendations and any additional policy work required.
Peart said that process was expected to take years and would need to be balanced against other government priorities.
What this means for de facto couples
The practical effect of the current rules is that when a de facto relationship of three or more years ends, the default position is equal division of relationship property — including the family home, vehicles, KiwiSaver and other assets accumulated during the relationship.
For couples who have unequal asset ownership going in, or who contributed differently to the relationship in non-financial ways, the current system can produce outcomes that feel arbitrary. The Law Commission's proposed shift — sharing only the value gained during the relationship rather than the full pre-existing asset — was intended to address that.
Until any reform is enacted, the existing rules apply. That means de facto couples who are considering separation should understand that the three-year threshold triggers the same property-sharing framework as marriage, and that courts apply the same principles to both.
This article is for general information only and is not personalised financial advice. Seek advice from a licensed financial adviser (registered on the FSPR) for guidance specific to your situation.