Affordable housing trust says no appeal

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Queenstown’s affordable housing trust will not appeal a High Court ruling enshrining the loss of the trust’s tax-free charitable status. 

The decision comes in a statement today (Wednesday) from Queenstown Lakes Community Housing Trust chair David Cole. 

“The court’s decision establishes case law that locks out not-for-profit housing organisations from qualifying as charitable organisations,” Cole says. 

For the past fortnight, his trust has been mulling over whether to appeal Justice MacKenzie’s verdict. 

The High Court judge upheld the Charity Commission’s decision last September to strip the trust of its charitable status. 

The commission originally registered the trust for charitable and tax-exempt status in January 2008 under the “relief of poverty” category, the judge notes. 

Losing that status essentially means the trust will have to pay tax on capital gains as its properties appreciate in value – meaning fewer funds will be available to put up new homes for its shared-ownership programme. 

The problem was, Justice MacKenzie ruled, that under the Charities Act 2005 “the term ‘charitable’ is used not in its ordinary dictionary meaning but in the particular technical meaning that the law has ascribed to that word”. 

With the trust seeking applicants with annual household income of $86,000-$122,000, the judge said: “I consider those who are eligible to participate in the shared ownership programme are not, even in the relative sense, poor.”

Cole today (Wednesday) says his trust doesn’t want to throw more community funds into a further Court of Appeal challenge when the matter is really something for the politicians to fix. 

“We cannot commit further community funds to defend a structure and set of activities that the Crown supported when the trust was established and which another Crown agency [the Charities Commission] has sought to unravel,” Cole says. 

“It is now up to the politicians to correct the anomaly.” 

Housing Minister Phil Heatley is holding out some hope, Cole says. 

“We’re now relying on an undertaking from [Heatley] received last week to have officials look at recommendations for restoring certainty to a sector that government is relying on as a key part of its housing policy,” Cole says.