Separation is one of the most financially significant events in a New Zealander's life. This guide covers the Property (Relationships) Act 1976 (PRA) and how it splits assets, what counts as relationship property vs separate property, the family home, KiwiSaver splitting rules, child support through IRD, contracting out agreements (prenups), and practical steps to protect yourself financially during a separation. This is educational information, not legal advice. Always consult a family lawyer for your specific situation.
The PRA is the law that governs how property is divided when a qualifying relationship ends (by separation or death). Key concepts:
| Relationship Property (split 50/50) | Separate Property (stays with owner) |
|---|---|
| Family home (regardless of whose name is on the title) | Property owned before the relationship (if kept separate) |
| Family chattels (furniture, cars, appliances) | Inheritances received during the relationship (if kept separate) |
| Savings and investments accumulated during the relationship | Gifts from third parties (if kept separate) |
| KiwiSaver contributions made during the relationship | Personal injury compensation |
| Business interests built during the relationship | Property covered by a valid contracting out agreement |
| Income earned during the relationship | Trust property (with caveats) |
Warning: mixing separate and relationship property. If you inherit $100,000 but deposit it into a joint account or use it to renovate the family home, it can become relationship property through "intermingling". Keep separate property clearly separate if you want to protect it.
The family home is almost always relationship property, even if only one person is on the title, even if one person paid the entire deposit, and even if it was owned before the relationship. The home becomes relationship property if both partners have lived in it as the family home. This is the single most contested asset in NZ separations.
KiwiSaver balances accumulated DURING the relationship are relationship property. Pre-relationship balances remain separate (if you can prove the split). The division works like this:
KiwiSaver splitting is done via court order or agreement. The fund provider transfers the relevant amount. The money stays in KiwiSaver (it's not cashed out).
If you have dependent children and separate, the non-custodial parent (or both, depending on shared care) pays child support. Key points:
Unlike child support, spousal maintenance (one partner supporting the other after separation) is not automatic in NZ. It's only awarded if one partner can't reasonably support themselves. Factors: ability to work, health, age, length of relationship, earning capacity, and responsibilities. Courts rarely award long-term spousal maintenance in NZ compared to the UK or USA.
Relationship debts (mortgage, joint credit cards, loans taken for family purposes) are also split 50/50 under the PRA. Personal debts (gambling, debts hidden from the partner) generally stay with the person who incurred them. Joint and several liability on mortgages means the bank can pursue either partner for the full amount regardless of what the separation agreement says.
A contracting out agreement lets partners agree to different property division rules than the PRA default. Requirements:
Cost: typically $2,000 to $5,000 total (both lawyers). Worth it for anyone bringing significant assets into a relationship, inheriting during one, or in a second relationship with children from a first.
Three common options:
Couple separating after 12 years of marriage. Combined assets:
Inherited $200,000 from her mother. Deposited it into the joint mortgage to reduce debt.
Lesson: Keep inherited money in a separate account in your sole name. Never deposit it into joint accounts or use it for joint assets without a contracting out agreement.
Both in second marriages with children from first relationships. James brought a $700,000 property. Linda brought $150,000 savings.
Lesson: A contracting out agreement is especially valuable for second relationships, blended families, and anyone bringing significant assets. The $2,500 cost is trivial compared to the alternative.
Suspected her partner was hiding cryptocurrency and a secondary bank account during separation.
Lesson: Hiding assets during a separation is illegal and almost always discovered. Full disclosure is required. Courts punish non-disclosure harshly.
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