New Zealand's law for dividing property on separation is out of date and needs to change, the Law Commission says.

It has tabled its final report for its review of the Property (Relationships) Act in Parliament today.

It had earlier released proposals and received more than 300 submissions in response,

The Law Commission recommends a range of changes to make the law fairer for partners dividing property on separation.

The key recommendations include changing how the family home is shared.

At the moment, the home that a couple lives in is usually "relationship property" and divided equally on separation.

The Law Commission says, if it was already owned by one partner before the relationship began, or received as a gift or inheritance, only the amount it increased in value during the relationship should be split.

The commission also wants the court to have more powers to divide trust property - these would apply when a trust held property that was produced, preserved or enhanced by the relationship.

It also suggests family income sharing agreements, which would compel some people to share their income with their exes for a limited period after the separation to ensure the economic advantages and disadvantages from a relationship are shared more fairly.

Children's best interests should be given more priority in relationship property matters, including more rights to occupy the family home after the couple split.

The commission says the way relationship property matters were resolved should be improved to address behaviour that caused delay and increased costs.

"New Zealand has undergone a significant period of social change since the Property (Relationships) Act 1976 was passed," says Helen McQueen, deputy president and lead commissioner on the review.

"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. 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 says the Government would now give further consideration to the report's recommendations and the wider impact of its proposals.

-Stuff.co.nz/Susan Edmunds.