An elderly couple say they have been pushed out of Arrowtown because the Queenstown Lakes District Council has increased their land rent by almost $35,000.
But Queenstown Lakes Mayor Jim Boult said the council had "bent over backwards" to try to help the couple.
Seventy-eight-year-old Bill Swann, who bought his home in the late 1960s, described the rent hike as "ridiculous".
He and partner Gweneth Marshall (77) moved to Invercargill last month, saying they could no longer afford to live in Arrowtown.
Swann's 21-year "Glasgow lease" came to an end in February, prompting a market review by the council, which owns the land.
The result was a jump from $4125 to $39,000 rent per annum.
However, Boult said a number of options were investigated in 2007, including an opportunity to buy out the land component, making it a freehold property. That was not taken up by Swann.
The council also proposed a further five years at $5000 per annum. But Swann, who grew up in the historic gold-mining town and worked for the council for about 30 years, said the situation could have been handled better.
"Considering the age of a bloke, they could have looked at the lease a little bit differently.
"I think they could have, but they said they couldn't. To me, I think that is b.... They have gone to $39,000. That, in my book, is just bloody ridiculous."
But Boult said the council did recognise Swann's age.
"For that reason we agreed to a rental level for the next five years that was very fair in the circumstances.
"We had also been approached by Mr Swann outlining personal circumstances, which we factored in and, in short, [the council] bent over backwards to try to be as accommodating to Mr Swann as we possibly could."
The council was "surprised" when Swann gave notice on the first day of the new lease term.
"Because he would have been able to live for at least the next five years at a very advantageous rental rate."
Rent was assessed at 6 per cent of the land value at the time of lease renewal.
Marshall said the situation was shocking and stressful.
"I think most reasonable people would realise that too. It wasn't financially viable for us to stay there."
The council has now bought the property and details were finalised early this month.