The laws that govern how property should be divided when couples split up are out-of-date and need reform, the Law Commission says.
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The commission has released the final report of its review of the Property (Relationships) Act and made 140 recommendations.
The biggest is changing how the family home is shared.
Rather than the automatic 50-50 split, if the family home was owned by one partner before the relationship began or was a third party gift or inheritance, only the increase in the value of the home during the relationship should be shared, the Law Commission said.
It also wants courts to have greater power to divide trust property and improvements to the way relationship property matters are resolved in practice, to address behaviour that causes delay and increases costs.
The commission has also mooted family income sharing agreements, which would require some partners to share income for a limited period following a break-up to ensure the economic advantages and disadvantages from a relationship are shared more fairly.
And it wants children's best interests given greater priority in relationship property matters, which should include greater rights to occupy the family home immediately following the separation.
Lead commissioner Helen McQueen said New Zealand has undergone a significant period of social change since the Property (Relationships) Act was passed.
"It is important that the law keeps pace with social change and reflects the reasonable expectations of New Zealanders. In our view, the law for dividing property on separation is no longer fit for purpose in 21st century New Zealand," she said.
"We think that some of the fundamental concepts of the law remain appropriate, such as the general rule of equal sharing and its application to marriages, civil unions and de facto relationships that last for three years or more.
"But we recommend other significant changes that will affect what property is shared. These recommendations are designed to make the law more responsive to the wide range of different family situations that exist today."
Justice Minister Andrew Little said the Government would now consider the commission's recommendations.
