September, 2010The Queenstown Lakes Community Housing Trust is considering lodging a High Court appeal against deregistration by the Charities Commission.
The trust, formed in 2007, was formally deregistered this month because the commission says the organisation does not meet guidelines for charitable status.
Trust chairman David Cole said deregistration meant it was liable to pay taxes on any sales of its co-owned properties in the Queenstown Lakes District.
The trust, which helps 35 moderate income families pay for their homes, faces hefty tax bills and an uncertain future.
First-time homeowners Ryan and Maria Fish said they would not have been able to buy their $420,000 Arthur's Point home in June without help from the trust, which co-owns 18 per cent of the property.
Mrs Fish said without the trust the couple and their two young children would have missed the opportunity to buy their preferred home.
"We love it here.
"I don't know where we would be without the trust," she said.
Mr Fish said the family had the trust to thank for their quality of life in Arthur's Point.
Mr Cole said the trust continued as a non-profit organisation and sales were driven by the homeowners.
Charitable status is based on assuaging a community need and the commission's decision said the trust's co-ownership model did not amount to the relief of poverty.
Income derived by the trustees did not meet the test for charitable purposes and deregistration was in the public interest, the commission said.
Mr Cole said the trust was considering whether an appeal to the High Court was appropriate.
"If the tax comes in,our ability to help the next family declines. It's a tax on community capital.
"My argument is the Crown cannot have it both ways," he said.
Charities Commission chief executive Trevor Garrett said deregistration was based on charitability tests for those receiving help.
Some of the beneficiaries had household incomes of more than $80,000, five earned more than $100,000 and one earned $205,000.
"Absolutely none of this is about whether the trust is doing a good job or doing something worthwhile in Queenstown," he said.
The Commission said many of the beneficiaries would be able to afford housing if they bought property in another district.
Source: The Southland Times
Queenstown Property Limited