Hit the road, Jack’s

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The multi-millionaire developers of Queenstown’s Jack’s Point have been turned down for a
charitable trust. 

George Kerr and John Darby’s application for charitable status on their Jack’s Point Community Housing Trust was declined late last year, according to Charities Commission documents. 

After donating $5.2 million to Queenstown Lakes District Council’s housing trust, Darby says they now want to put another $1.5m into affordable housing directly – on their own Jack’s Point land. So they created a housing trust, modelled on QLDC’s. 

Charitable status would have given Jack’s Point the same tax break as QLDC’s trust, Darby says. 

“It was to enable us to gift land into the trust without being taxed on the gift.” 

And charitable status would also have benefited the trust, he says. 

“If a not-for-profit housing trust is gifted land and builds housing on it and sells it below market [price], it’s taxed at what would otherwise be the market rate. 

“Otherwise it’s deemed gifting – and the only way around that is to have charitable status,” Darby says. 

But the Jack’s Point application fell on deaf ears. 

“The provision of housing is only considered charitable where the housing is provided for those who are poor or disadvantaged,” the Charities Commission said, concluding the Jack’s Point trust “does not have substantially charitable purposes”. 

The Jack’s Point bid was peppered with references to “more cost-effective housing” and “low to moderate household incomes”. 

However, commission members would have noted a comment by one of its officials vetting the application. “[Jack’s Point] is an exclusive development in a very expensive location.” 

Darby is philosophical, saying the rejection came during clamps on charitable trusts after pokie-machine abuse. 

“We’ve just got to get our lawyers to wade back into it.”