Question: Whatever happened to the relief promised to residential property owners whose properties were reclassified commercial or industrial and whose property taxes quadrupled?
Answer: Quite a few of the property owners failed to meet the Sept. 1 deadline to dedicate their properties for residential use, and, therefore, were unable to receive a refund and the dedication for the 2010-11 tax year, said City Councilman Romy Cachola.
Some property owners received the refund last year, but 54 were denied, he said.
He said the compliance time was very short, just a month or so after homeowners received their property tax bills. Many properties have multiple owners who needed to sign off on the dedication forms, and some lived out of state or were out of town and missed the deadline, he said.
Therefore, Cachola has proposed Bill 7 (2011), CD1, which would provide a
one-time real property tax refund for residential property owners whose properties were reclassified to commercial or industrial.
“It’s more or less giving them one more chance,”
Cachola said. “Quite a few of these people are elderly, who borrowed money, and are living on Social Security income.”
All nine Council members co-introduced the bill, which goes before the budget committee April 12.
In August, Cachola’s office was flooded with calls from Kalihi residents who received their tax statements and complained their taxes jumped to $12.40 from $3.42 per $1,000 of assessed value. One 79-year-old Kalihi man’s taxes skyrocketed to $10,552.40 from $2,335.52 the previous year.
The city said about 250 parcels were reclassified from residential to commercial or industrial, and that it sent letters Dec. 15, 2009, informing property owners of the classification changes. But many of the property owners said they never received such a letter.
And Cachola said the city’s Dec. 15, 2009, notification letter did not allow any time for homeowners to file a dedication because the Sept. 1, 2009, deadline had already passed for the 2010-11 tax year.
The law allows single-family homeowners and apartment building owners to dedicate their properties by Sept. 1 to residential use and allows them to pay residential rates.
Bill 7 proposes property owners of single-family homes or apartment buildings used solely for residential purposes would receive a refund for the difference between the residential rate and the higher rate they paid.
If a portion of the property is used for commercial purposes, the owner does not qualify for a refund.
Those entitled are property owners who:
1) Did not receive a refund for the parcel.
2) Applied for the residential use dedication by Sept. 1 for tax year 2012-13.
3) Certified by Sept. 1 that the parcel was used exclusively for residential use from July 1, 2010, to June 30.
4) Have been granted a dedication for residential use for tax year 2012-13.
This update was written by Leila Fujimori. Suggest a topic for “Whatever Happened To …” by writing Honolulu Star-Advertiser, 500 Ala Moana Blvd., Suite 7-210, Honolulu, HI 96813; call 529-4747; or email email@example.com.