The city Real Property Assessment Division began accepting tax compromise claim forms from eligible Oahu homeowners Thursday, while Honolulu City Council members promised to look at ways to help others who have been hit with dramatically higher tax bills after being pushed into the Residential A tax classification.

The Council passed Resolution 14-179 on Wednesday, allowing Oahu homeowners to apply for a one-time tax compromise if they qualified for owner-occupant tax breaks by last Sept. 30 but did not get them.

City officials said late Thursday they had no way of knowing how many times the form was downloaded on the first day, although the website did see a 20 percent increase in daily hits. Budget Director Nelson Koyanagi said the division office physically received one application and had about five walk-in requests for forms on the first day.

Anticipating the resolution would pass, the Department of Budget and Fiscal Services almost immediately put up claim forms and information on how the plan works at the website www.realpropertyhonolulu. com/. Eligible property owners have until Sept. 30 to submit their claim forms and necessary support documents.

Exactly how many homeowners are eligible for the relief is still uncertain.

City finance officials estimate that of about 70 queries they’ve received to date only about 10 property owners will benefit. Council Chairman Ernie Martin and Budget Chairwoman Ann Kobayashi, who introduced the measure, say the number is likely significantly higher.

Because the idea behind the tax compromises is to help owner-occupants who don’t have a homeowner exemption, the relief is available only to those who live in their own homes and can prove they have been there since at least Sept. 30, the annual deadline for new exemption requests to be filed.

City budget officials said because the financial impact is so great, they expect to receive compromise bill claim forms from many property owners who don’t qualify for it under the resolution. The claim should also include a completed application for a homeowner exemption, they said.

As a result, they emphasized that all claims filed need to be accompanied by utility bills and income tax returns.

"The chance for fraud is pretty high because the tax amounts might be high enough for people to try to apply for homeowner exemptions when they don’t necessarily live there," Koyanagi said. "If they don’t want to provide that, they won’t get the compromise."

The impact of not obtaining the homeowner exemption was multiplied exponentially this past year, however, when Mayor Kirk Caldwell signed into law a bill passed by the Council creating the new Residential A tax class, and placing all 7,400 residential properties valued at $1 million or more and without homeowner exemptions into that category.

The Council raised the tax rate for Residential A properties to $6 per $1,000 of value in June (while leaving the standard Residential class rate at $3.50 per $1,000). That 71 percent increase in the tax rate, combined with soaring valuations in some neighborhoods, resulted in some Residential A property owners seeing their tax bills more than double.

Among those who should benefit from the legislation is 15-year North Shore resident Mark Fergusson, who testified at the Council’s meeting Wednesday that he and his wife built a new home and "just haven’t got around" to filing for a homeowner exemption.

"The only warning we got was a tax bill that went from $3,300 to $9,400," he said. "This is going to be a major burden on us."

A number of other property owners have complained to the Real Property Tax Division, Council members and the Star-Advertiser about being bumped into the Residential A class.

But many of them already have a homeowner exemption or don’t qualify for one, so the resolution approved Wednesday doesn’t help them.

Manoa resident Elaine Nishime told Council members that creation of Residential A further adds to Hawaii’s reputation as a tax hell.

"It does not take much for a property here in Hawaii to be million-dollar one,"Nishime said, noting that the median price of a home is now more than $600,000. "Modest, middle-class folks own million-dollar homes, and in most cases, those homes are a little long in the tooth."

Some local families own rental properties as an investment to help their children, she said. Some, like the elderly widow who is her next-door neighbor, will now have to pass on a 100 percent-plus increase in property taxes to their tenants, Nishime said.

She criticized city officials for not making a bigger effort to inform property owners about being bumped into the Residential A class.

City officials countered that an explanation of the new higher tax class was described in the assessment notices issued to property owners in December.

As for her own situation, Nishime said, she did not realize that she needed to file for a new homeowner exemption after moving. No one told her it was necessary and she assumed it would transfer automatically, she said.

Retired attorney John Conway supported the resolution, noting that the tax on the Waialae Iki home that he and his wife inherited from her family jumped from $7,500 to $18,000.

He questioned the logic behind the sequence of events from the creation of the Residential A class in mid-September, the Sept. 30 deadline to file for a homeowner exemption, the mid-December assessment notice and the Council’s setting of tax rates in June.

"Property owners entitled to a home exemption had virtually no notice and no time to file for such an exemption to avoid this huge tax increase," Conway said.

Hawaii Kai certified public accountant Natalie Iwasa said more than 100 of the new Residential A properties are just over the $1 million assessment threshold. She suggested Council members consider raising the $1 million threshold.

Councilman Joey Manahan last year proposed a change making only those residential properties valued at $1.5 million or more to be in the Residential A class. That plan was shot down by Manahan’s colleagues after Caldwell officials said the shift would leave the 2015 city budget with a large revenue gap.

Iwasa also urged the Council to look at other possible ways to give taxpayers relief, including reassessing the way properties that have more than one house on them are taxed, using "tiered" rates that would impose higher rates for properties valued at significantly higher than $1 million, and giving tax breaks for those who have owned their properties for lengthy periods.

Diamond Head resident Michelle Matson said city assessments are typically higher than what an independently hired assessor would conclude, suggesting an overhaul in methodology is required.

Kobayashi said the main priority was to help those who have lived in their homes for years but, for whatever reason, never applied for a homeowner exemption.

Several Council members said they intend to introduce legislation that would help others dramatically affected by the sudden impact of the Residential A tax class.

Martin said the Council will take a hard, second look at the argument that the $1 million threshold to move into Residential A is too low.

Councilman Ikaika Anderson, for instance, said he intends to introduce a bill allowing a property owner to transfer a homeowner exemption after moving from one purchased home to another. He also wants the tax office to send out an estimated bill with the December assessment notices based on the current year’s tax rates.

Kobayashi said the Council should also look at placing a ceiling on how much a property owner’s taxes can be increased in any single year, what’s known as a "circuit breaker."

Councilwoman Kymberly Pine said she’s troubled at the timing of annual deadlines referenced by Conway and others.

"It needs to be fixed,"she said. "It’s hard to protest something in December for a bill you’re going to get in July, but then you only have a month in December (to file an appeal)."

Koyanagi emphasized that the appeals process is set up to address concerns about valuations and classifications, not tax rates.

At least some of the issues and proposed remedies raised are being discussed by the Real Property Tax Review Commission.

The Caldwell administration did not oppose the resolution, but city Budget Director Koyanagi expressed worries about how allowing the compromise would affect the city’s revenue stream. The administration earlier estimated that the $6 rate on Residential A property owners would provide the city with $33 million in additional revenues.

Technically, the resolution leaves it up to Koyanagi to decide what the "compromise" tax bill will be for each qualified homeowner’s claim.

Caldwell, however, has said he intends to fix the "unintended consequence"caused by creation of the Residential A class and to assist all who qualified for an exemption by Sept. 30 but did not obtain them.