Hawaii Property Tax Structure Adds New Category
With the City Council's passage Tuesday of Bill 09-51, owners of property on O'ahu who don't live on their land — including most residential and commercial landlords — are probably in for some major tax hikes. Those increases, the critics say, will be passed on to everyone.
Deputy Budget Director Mark Oto said it's premature to say whether Mayor Mufi Hannemann will need to ask any property owners to pay more in taxes when he unveils a budget package next March. But, Oto added, indications are that unless taxes are raised, the city will face a $140 million shortfall in tax collections next fiscal year.
If there are to be tax hikes, "the mayor's commitment when he introduced the (owner-occupant) bill is he would like to see the tax liability not increase for the average homeowner," Oto said. Hannemann is expected to sign the bill, for which his administration introduced and lobbied heavily.
About $85 million of the projected $140 million revenue shortfall next fiscal year is the result of a steep drop in property assessments. Gary Kurokawa, head of the Budget & Fiscal Services Department's Real Property Assessment Division, said that over all classes, assessments are down about 10 percent from the previous year. Recognizing that "adjustments" may be needed in the tax rate, creating a new owner-occupant classification gives the administration and the council an additional tool to shield those who own their homes from a sharp increase, Oto said.
City officials say residential properties constitute 82 percent of the assessment pie, and more than half of that comes from owner-occupants.
With more than 80 percent of all property value coming from residential properties, "if you don't touch residential, who are you going to touch?" Oto said. "In the past, the council has touched commercial and hotel/resort. And the concern there is, given the economy, how much (more of) a burden can these classes really take?" "Really, the last resort is raising taxes," Oto said.
To find out property taxes on a certain parcel, just give me a call. I can do a thorough market analysis for you too, free of course.
Barbara Abe, Realtor
808-226-2537
barbara@barbarashawaii.com
(resource: Honolulu Advertiser)