The State Administrative Tribunal (Tribunal) has refused a rate exemption sought on separately owned strata lots within a retirement village on the grounds that providing a villa for one's own benefit is not 'land used for a charitable purpose'
The Kingsley Case
The tribunal in The Owners of the Kingsley Retirement Village Strata Plan 12484 and City of Joondalup  WASAT 26 (Kingsley) had to determine whether each of the 64 strata lots making up the retirement village was used exclusively for charitable purposes for the relevant rating year, and therefore not rateable land under s.6.26(2)(g) of the Local Government Act 2005. A further lot (Lot 34) was used as the village centre.
The retirement village was developed by Westside Retirement Communities Pty Ltd (Westside) in 1984. Westside had an ongoing income through the refurbishment and subsequent sale of villas in the retirement village.
The Tribunal noted that relief of the aged is a charitable purpose was supported by several authorities, however the Tribunal distinguished these cases. In Kingsley the land and units were not owned, operated, or managed by an organisation with charitable objects. Each strata lot comprised a separately owned villa used as a private residence, and the retirement village was self-managed by a committee elected from the strata lot owners.
Own private purposes
The Tribunal held that providing a villa for one's own personal accommodation is not land used 'exclusively for a charitable purpose'. None of the strata lot owners used his or her lot for a charitable purpose, that is, for the relief of the aged and for the benefit of the community or an appreciably important class of the community.
The Tribunal found that the individual owners of the strata lots, being persons aged 60 or older, used the villas for their own private purposes, that is, they occupied the villa on their own respective strata lot as a private residence for their own accommodation needs. The Tribunal also noted that Rule 2 of the Residence Rules prohibited the owner from using his or her villa for any purpose other than for the purpose of a private residence.
The Tribunal was also not satisfied that Lot 34 (owned by Westside and used as the village centre) was used exclusively for a charitable purpose. The Tribunal concluded that Westside's activities comprised significant profit-making activities and the making available of the village centre was a very minor aspect of its overall activities, which were carried on for significant commercial gain or profit.
Key takeaways to note
- Local governments should consider the Kingsley decision (and the authorities cited) when considering an application for a rate exemption under s.6.26(2)(g) of the Local Government Act with respect to aged care accommodation, and in particular whether the accommodation and services are provided for the benefit of aged persons in the community, or as a private residence for the lot owner's own accommodation needs.
- Retirement villages made up of individually owned strata lots, and occupied and used by the strata lot owners as a private residence for their own accommodation needs, are unlikely to obtain a rate exemption under s.6.26(2)(g) of the Local Government Act for charitable purposes for relief of the aged.
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