Separating? Why You Should Check Whether You Own Property as Joint Tenants | NZ Legal

If you and your partner own a home together, there is a good chance you own it as joint tenants. That is the default for most couples buying property in New Zealand. But if your relationship ends, that ownership structure can create a serious problem. One that your will cannot fix.

Here is what you need to know, and what to do about it.

What Does “Joint Tenancy” Actually Mean?

When most couples buy property, the default is joint tenancy. The bank often prefers it, it keeps things simple while you are together, and it means if one of you dies, the other gets everything automatically. That automatic right is called the right of survivorship, and it is exactly what causes problems when a relationship ends.

The Survivorship Rule: Your Will Does Not Apply

As a joint tenant, if you die, your interest in the property does not pass under your will. It passes automatically to the surviving joint tenant by operation of law.

It does not matter what your will says. It does not matter that you have separated. It does not matter that you have not spoken in five years. If you are still registered on the title as joint tenants at the time of your death, your ex-partner gets the property.

What if survivorship has already occurred?

There is a last-resort mechanism. Under section 88(2) of the Property (Relationships) Act 1976, the deceased’s personal representative can apply to the court to claw back into the estate property that has already passed by survivorship, so that a Family Protection Act claim can be made on behalf of dependants who have been left with nothing.

But this requires court proceedings, the court’s leave, and meeting a “serious injustice” test. It is expensive, slow, and uncertain. Prevention, severing the joint tenancy before anything happens, is far simpler and far less costly.

Tenants in Common: The Alternative

Tenants in common is different. As tenants in common, you and your co-owner each hold a defined share of the property, typically 50/50, but it can be any split agreed between you. Crucially:

• Your share is yours to deal with as you choose.
• When you die, your share passes under your will to whoever you nominate.
• The other owner does not automatically receive your share.

This is the ownership structure you almost certainly want if you have separated.

Joint Tenancy vs Tenants in Common

	Joint Tenancy	Tenants in Common
Shares	No defined shares, you own the property jointly	Each owner holds a defined share (e.g. 50%)
On death	Survivor takes everything automatically, right of survivorship	Your share passes under your will to whoever you nominate
Does your will apply?	No	Yes
Can you leave your share to your children?	No	Yes
Default for NZ couples?	Yes	No, must be specified

This Matters Most in Blended Families

If you are in a second relationship and have children from a previous one, joint tenancy is particularly risky. What most people in that situation actually want is:

• shared ownership of the property while you are both alive;
• some protection for your surviving partner; but
• ultimately, their share of the property to pass to their own children on death.

Joint tenancy defeats all of that. Everything goes to the survivor, and the survivor’s own will and family arrangements then dictate what happens next, not yours.

This also has implications for will drafting. If you intend to leave your surviving partner a life interest in the property (a right to live there, while preserving the capital for your children), that life interest is also at risk if the property is in joint tenancy. The property passes to the survivor by survivorship before the will can operate on it, so the life interest never takes effect. The joint tenancy needs to be severed first for a life interest arrangement to work.

Why Separation Is the Trigger

Separation is often chaotic. Property settlement, KiwiSaver, IRD, children: there is a lot to deal with. The title often gets left until last. But it is important to act on the joint tenancy sooner rather than later, because:

• Death can happen at any time. If you or your ex-partner dies before the title is sorted, the survivorship rule applies immediately.
• Your will is powerless against the survivorship rule. No matter how carefully your will is drafted, it cannot override a joint tenancy.
• Separation itself does not sever the joint tenancy. Moving out, filing for relationship property, getting a court order: none of these automatically changes the ownership on the title. Only registration of the severance at LINZ does that.

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Only registration of the severance at LINZ changes the ownership on the title — nothing else does, no matter how final the separation feels.

How to Sever a Joint Tenancy: The LTA 2017 Mechanism

The good news: severing a joint tenancy is a relatively straightforward process under section 48 of the Land Transfer Act 2017. Importantly, it can be done unilaterally. You do not need your co-owner’s agreement or signature.

The mechanism works like this. A transfer instrument is prepared through Landonline, LINZ’s electronic property dealings platform. The instrument records a transfer from both owners as joint tenants, to both owners as tenants in common in defined shares (typically 50/50). The severing party signs the instrument; the other owner’s share converts automatically as a consequence of the registration. The severance takes effect when the Registrar-General of Land registers the dealing.

Step by Step

1. Instruct your property lawyer. You do not need your co-owner’s agreement. A NZ-qualified property lawyer handles the process from here.
2. Transfer instrument is prepared. Your lawyer prepares the transfer instrument in Landonline, recording both of you as tenants in common in equal shares.
3. You sign. You sign the instrument, typically via a remote video call. You will need photo ID: a passport or driver’s licence.
4. Lawyer certifies and lodges. Your lawyer certifies the instrument and lodges the e-dealing through Landonline.
5. LINZ registers the dealing. The Registrar-General of Land registers the transfer. A new title is issued recording you and your co-owner as tenants in common, ½ share each. The severance takes effect on registration.
6. Notice of Sale is filed. A Notice of Sale is filed with the relevant territorial authority so the council can update its records.

A note on unequal shares and the PRA

If you and your co-owner want to sever to unequal shares, for example, to reflect different contributions to the purchase price, the registered shares are not automatically protected from a relationship property claim under the Property (Relationships) Act 1976.

A PRA claim on separation or death can override the registered ownership unless you also have a contracting out agreement in place (sometimes called a “relationship property agreement” or “pre-nup”) that specifically provides for those shares. If unequal shares matter to you, talk to your lawyer about whether a contracting out agreement should be in place alongside the severance.

Before You Sever: Quick Checklist

Before you sever

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1. Check the current title: confirm you are registered as joint tenants (not already tenants in common)
2. Have your IRD number ready: you will need it for the transfer instrument
3. Have your photo ID ready: passport or NZ / Australian driver’s licence
4. Review or update your will: once severed, your ½ share passes under your will, so make sure it reflects your wishes
5. If you want unequal shares, consider whether a contracting out agreement is also needed
6. Let your lawyer know if there are any mortgages, court orders, or agreements affecting the property: these need to be considered before the dealing is lodged

Reset

What About the Mortgage?

If there is a mortgage over the property, the bank is not directly affected by the severance of the joint tenancy. You and your co-owner remain jointly liable for the mortgage regardless. The broader property settlement, buying one party out, refinancing, or selling, is a separate process. The severance simply sorts the ownership structure on the title while everything else is worked through.

Will the Bright-Line Tax Test Apply?

A common question. The answer, in most cases, is no. Inland Revenue’s published guidance (QB 25/11, May 2025) confirms that where a joint tenancy is converted to a tenancy in common and neither party acquires a greater share than they already held, the bright-line start date does not reset. Your bright-line clock continues to run from the date you originally purchased the property.

If you bought before 1 October 2015 (when the bright-line test was introduced), the property sits outside the regime entirely. If you bought after that date, the current bright-line period is two years, reduced to two years effective for sales from 1 July 2024. A severance to equal shares does not restart that clock.

Ready to Take the Next Step?

If you have separated and still own property as joint tenants, this is worth sorting now, not later. It protects your share, ensures your will can do what you intend, and closes off the survivorship risk. The process is straightforward and can be completed entirely remotely.

Contact NZ Legal to get started. Fill out our quick contact form and we will be in touch within one business day. You can also learn more about our property law services.

Sources

1. Land Transfer Act 2017Section 48 sets out the mechanism for severing a joint tenancy by transfer instrument.
2. Property (Relationships) Act 1976Section 88(2) allows clawback of property already passed by survivorship in limited circumstances.
3. Family Protection Act 1955The basis on which dependants can claim against an estate left with nothing.
4. QB 25/11 (Inland Revenue, May 2025)Confirms severing a joint tenancy to equal shares does not reset the bright-line start date.