A member of Wellington's Vogel family says he's appalled the Crown is selling Vogel House on the open market, rather than returning it to the family.
Jocelyn Vogel donated the opulent Lower Hutt property, which is valued at nearly $5 million, to the Crown in 1965.
Since then it has been used as a residence for prime ministers Robert Muldoon and David Lange, and was also used as a temporary home for former Governor-General Sir Anand Satyanand while Government House was being renovated in 2009 and 2010.
After last year deciding it no longer needed the property, a battle ensued between the Vogel descendants and two charities named as beneficiaries in Jocelyn Vogel's will - the SPCA and the Vogel Charitable Trust - as to who had rights to it.
The Vogel descendants said they had conversations with their grandmother shortly before her death in 1988 during which she said she hoped the property would be returned to the family once it was no longer needed.
However, the Crown has now decided to sell Vogel House on the open market and pocket the proceeds itself.
Jocelyn Vogel's grandson, Tim Vogel, said his grandmother would be disgusted by the situation.
"She clearly expressed that it was her wish it was returned to the family... if she was alive today she would be horrified to realise the government is looking to sell this gift for profit.
"If they were intent on the Crown actually wanting the money, they would've sold it themselves and given the Crown the money."
Tim Vogel's great-great grandfather, Julius Vogel, was New Zealand's eighth prime minister - or, as it was then known, premier - and introduced the first women's suffrage bill to Parliament in 1887.
Vogel House, which was built in 1933, is a Category One Heritage building, meaning a 'place of special or outstanding historical or cultural significance'.