25/06/2013 - 15:49

Air Force joins motor trade, CCI in tax win

25/06/2013 - 15:49


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Air Force joins motor trade, CCI in tax win

A Mandurah retirement village operator has become the third organisation in Western Australia in the past year to be deemed a charity by the State Administrative Tribunal, effectively opening the doors for it to gain a tax concession.

The Royal Australian Air Force Association WA (RAAFA), which owns Erskine Grove retirement village, has successfully argued that it is a charitable organisation.

The City of Mandurah had previously argued that, because the residents of the village paid the full cost for their independent living units, RAAFA's land was not being used for a charitable purpose,

The Motor Industry Training Association and the Chamber of Commerce and Industry WA have benefited from similar rulings in the past 12 months.

RAAFA was initially refused an exemption from local rates by the City of Mandurah in early 2012.

The tribunal ruled that charging of occupancy costs at or around commercial rates did not affect the charitable status of the village.

Tribunal judge Tim Sharp noted that, had the rates charged at the village been so high that only the very wealthy could afford to take up a place at the village, the outcome might have been different.

Erskine Grove retirement village residents pay entry loans, retention sums and operating costs charges, which are used to fund the retirement village.

Operating costs are charged at 25 per cent of the single aged pension per annum or 30 per cent if two people occupied the independent living unit.

Entry loans range from $160,000 to $307,000 depending on the independent living unit, and are calculated based on the local median house price and equivalent charges being made by other retirement villages in the area.

Apart from occasional Lotterywest grants, RAAFA did not receive any funding from either the state or federal government or any other external source.

The Erskine Grove retirement village is made up of 197 independent living units and a community centre, which includes a gymnasium, an activity room, a library and an arts and crafts workshop.

In February, the tribunal found the Motor Industry Training Association's training centre at Joondalup was a charity and as a result was not liable for local government rates on the training centre.

In July 2012, the tribunal found the CCIWA had some activities that were considered to be charitable.

The CCI and the Office of State Revenue later negotiated a settlement on which of CCI's activities were subject to payroll tax.

Lawyer for RAFFA, Jackson McDonald partner Julius Skinner, said he had spent much of the past nine years working in local government law, and he hadn't noticed an increase in the number of clients whose objections to paying rates or taxes had been taken to the tribunal.

"There is always a smattering of them every year when rates notices are issued," he said.



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