Housing trust tax uncertainty resolved

David Cole.
David Cole.
A Queenstown housing trust says it will not face further tax obligations after the Government announced plans to introduce new tax legislation, giving certainty to community housing providers.

Queenstown Lakes Community Housing Trust chairman David Cole said the new legislation provided tax exemption for approved community housing providers, bringing years of uncertainty to an end.

The trust was deregistered as a charity five years ago and ultimately lost a High Court appeal before receiving a $6 million tax bill following an Inland Revenue Department assessment.

That bill was settled on behalf of the trust by the Crown.

Under the new tax provisions, a point-of-entry test and new eligibility criteria would be introduced which focused on the income and assets of the community housing providers' clients and matched the KiwiSaver HomeStart programme criteria.

Mr Cole said that meant the income threshold had been set at $80,000 for an individual and $120,000 for a couple, with no asset test for first-home buyers.

The legislation would be applied retrospectively from April 14, 2014, which meant the trust would not face any further tax obligations since its IRD settlement.

''It has taken more than three years to resolve this complex matter with Crown agencies and we are very pleased the uncertainty of the trust's tax status during that period and going forward will now be resolved with this Government announcement,'' Mr Cole said.

''This issue has been hugely distracting for trustees over many years and I am pleased our energies and focus can now be wholly directed on delivering more houses for lower-income households, for a community that has among the most expensive housing costs in the country.''

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