Bill English has been told he cannot live in the Prime Minister's official residence because of a legal quirk.
That means Premier House in Thorndon, Wellington, will be used only as a function and conference centre while he leads the country.
English and wife Mary will instead remain in his family home in Karori while he is Prime Minister.
The problem came about because English is a Wellington MP so cannot access taxpayer-funded accommodation in the capital. Premier House is owned by the Crown and counts as taxpayer-funded accommodation.
Ministers can claim up to $41,000 a year in accommodation expenses, but only if they live outside Wellington.
The law was changed in 2009 to prevent MPs "double-dipping", or claiming accommodation expenses if they already lived in the same city as Parliament.
Coincidentally, English was one of those caught double-dipping. He claimed nearly $1000 a week for living in his family home in Wellington before the law was changed.
English said this morning that Premier House would not be "sitting empty" while he was Prime Minister.
"I understand there's two or three dozen bookings in the queue already so it will be a pretty busy place."
He said his inability to live in the official residence was probably an unintended consequence of the law change.
He had no plans to change the law and it would not be offered to deputy Prime Minister Paula Bennett, he said.
"It's Premier House," he said.
There is a possibility the official residence could be empty for many years.
If Labour wins the next election, leader Andrew Little will be in the same predicament because he lives in Island Bay.