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Question: I recently got divorced. It was painful and expensive, so I had to borrow money from my bank. In order to cover my monthly payments to the bank, I’m renting out my apartment, starting Thursday. At the same time, I signed a rental agreement for a smaller place, where I’m moving in right now. May I still claim the homeowner’s exemption, or do I have to report a change of status? And if so, who do I report it to, and what is the deadline and is there any other tax relief in my situation?
Answer: We’re sorry to hear about the divorce and hope you are OK. As for the home exemption, no, you may not continue to claim it after you move; it is reserved for owner-occupants.
Oahu’s basic home exemption deducts $80,000 from the assessed value of a residential property. The homeowner is taxed on the balance. The exemption rises to $120,000 for a homeowner 65 or older.
“If there is any change which might affect your home exemption, such as no longer occupying the property as your home, ceasing to own the property, and/or renting the property during the tax year, then you must report the change (Form P-43) to the Real Property Assessment Division, Department of Budget and Fiscal Services, City and County of Honolulu,” according to the division’s website, realpropertyhonolulu.com.
You must report the status change within 30 days but no later than Nov. 1, according to the division. You can do so online, at 808ne.ws/rpadcs, or submit a hard copy of the form to the RPAD office in Honolulu or Kapolei. Find a PDF of the form to fill out and print at 808ne.ws/formp43.
You may reclaim the exemption if you move back into the unit you own.
As for other tax relief, Honolulu County offers a real property tax credit to lower-income homeowners who meet certain requirements, but one of them is that the owner holds a home exemption — which you are relinquishing by moving out of the apartment you own.
We couldn’t find much relief for renters in Hawaii; there is a small income tax credit for those who meet income and other requirements. It is worth $50 per exemption and is limited to people who earn less than $30,000 a year and pay at least $1,000 a year in rent on a property that is not exempt from property taxes.
You might consult a tax attorney or accountant to ensure that you are making the wisest financial decision with your new living arrangements. A credit counselor also could assist as you deal with what we hope will be temporary financial setbacks following the divorce.
Q: My son took a call for me since I was not at home. The caller claimed to be from Publishers Clearing House and was inquiring for information to a bank account number, home address, etc. My son said, “There’s no one here with balloons and a large check.” The person had no words to say, and my son said he hung up on that person. Was it a scam? My son was not fooled.
A: Yes, it was a scam attempt; you did not miss out on a prize. Your son saved you from being ripped off. PCH says on its website that it notifies winners in person, by overnight express mail and occasionally by email. Not by phone. It never asks for bank account information. Nor does it charge a processing fee, tax or special handling charge, or seek any other form of payment in exchange for a prize. PCH collects information about these type of incidents at 808ne.ws/pchscam and reports it to the Federal Trade Commission.
Mahalo
A much belated mahalo to a kind and thoughtful person who found my driver’s license on New Year’s Day at Magic Island and who promptly sent it to me the very next day. I hope that I can return this kindness to someone in some way. — An embarrassed and thankful senior
Write to Kokua Line at Honolulu Star-Advertiser, 7 Waterfront Plaza, Suite 210, 500 Ala Moana Blvd., Honolulu 96813; call 529-4773; fax 529-4750; or email kokualine@staradvertiser.com.
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