The Three-Year Rule: De Facto Relationships and Your Assets

🏠 De Facto, Relationship Property and Separate Property

Two questions decide almost everything: are you in a de facto relationship, and which of your assets are relationship property. The Act sets out how the courts answer both.

What Counts as a De Facto Relationship

A de facto relationship is two people aged 18 or over who live together as a couple and are not married to each other or in a civil union. There is no single test. The court weighs a list of factors and no one factor is decisive, so a couple can be de facto even if they do not tick every box. The factors include:

• How long you have been together and whether you live together
• Whether there is a sexual relationship
• How financially dependent or interdependent you are, and any financial support between you
• Whether you own, use or acquire property together
• Your degree of mutual commitment to a shared life
• Whether you care for and support children together
• Who performs the household duties
• How the relationship looks to family and friends in public

Because the test is about the reality of your life together, a couple can be in a de facto relationship without ever calling themselves that. The three-year clock generally runs from when the de facto relationship began, not from when you first noticed it mattered.

Relationship Property vs Separate Property

Once the Act applies, your assets fall into two buckets. Relationship property is shared, usually equally. Separate property stays with the partner who owns it.

When Separate Property Becomes Shared

Separate property does not always stay separate. If you mix it into the relationship, it can turn into relationship property. A common example is an inheritance: if you keep it in your own account it usually stays yours, but if you use it to pay down the mortgage on the family home or pour it into a shared renovation, it can lose its protected status and become shareable. Our inheritance guide covers this in more detail.

📋 Exceptions and Contracting Out

The three-year rule and the equal split are the starting point, not an unbreakable law. There are situations where the Act applies earlier than three years, where the split is not 50/50, and where a couple sets their own rules by agreement.

When the Act Applies Before Three Years

A de facto relationship of short duration, meaning under three years, is usually outside the Act. But a court can still apply it early if both of these are true:

• There is a child of the relationship, or one partner made a substantial contribution to the relationship, and
• the court is satisfied that not making an order would cause serious injustice.

There is an important twist. When the Act applies to a short relationship, property is divided according to each partner's contributions rather than automatically 50/50. Financial and non-financial contributions still count equally, so caring for a child is weighed alongside paying the mortgage, but the even split is not guaranteed the way it is after three years.

When the Split Is Not 50/50

Even in a relationship of three years or more, equal sharing is a presumption, not a certainty. The main exceptions are:

• Extraordinary circumstances: a court can divide relationship property unequally where equal sharing would be repugnant to justice. The bar is deliberately high, so this is rare.
• Economic disparity: if the way you divided your roles during the relationship leaves one partner much worse off in income and living standards afterwards, for example because one gave up a career to raise children, the court can order a payment to help close the gap.
• Short relationships: as above, under three years the split follows contributions rather than an even division.

Contracting Out: The Section 21 Agreement

Couples do not have to accept the Act's default rules. A section 21 agreement, often called a pre-nup or a cohabitation agreement, lets you decide in advance how your property will be divided if you separate or one of you dies. It is the main way to protect a home, a business or an inheritance you bring into a relationship.

For the agreement to be valid, strict rules apply:

• It must be in writing and signed by both partners.
• Each partner must get independent legal advice from their own separate lawyer before signing.
• Each lawyer must witness the signature and certify that they explained the effect and implications of the agreement.

Even a properly signed agreement is not bulletproof. A court can set it aside if giving effect to it would cause serious injustice, so an agreement that is wildly one-sided may not hold. Get it done well, keep it fair, and review it if your circumstances change a lot.

🔢 Four Worked Examples

These examples show how the rules play out. The figures are illustrations, and every real case turns on its own facts, so treat them as a guide to the principles rather than a prediction.

Sources: Verified July 2026 against the Property (Relationships) Act 1976 on legislation.govt.nz, the Community Law manual (how the Act works, exceptions to equal sharing, and contracting out), and the Ministry of Justice at justice.govt.nz. This guide is general information, not legal advice. Speak to a family lawyer about your own circumstances.