Oahu homeowners who qualified for owner-occupant tax breaks by last Sept. 30 but did not get them will be eligible for a one-time tax compromise from the city under a plan approved by the Honolulu City Council Wednesday.
Officials with the city Department of Budget and Fiscal Services, who had anticipated Wednesday’s passage of Resolution 14-179, already have tax compromise claim forms for eligible homeowners available, as well as information about how the plan will work, at the website www.realpropertyhonolulu.com.
Eligible property owners have until Sept. 30 to submit their claim forms and necessary support documents.
But exactly how many homeowners are eligible for the relief is still uncertain. City finance officials estimate about 10 property owners will benefit.
Council Chairman Ernie Martin and Budget Chairwoman Ann Kobayashi, who introduced the measure, contend the number is significantly more.
The resolution is designed to help a segment of property owners who live on their properties but don’t already take the so-called "homeowner exemption" that’s available to them.
By itself, an $80,000 reduction in a property owner’s assessed value amounts to a savings of $280 (because all identified owner-occupants are taxed at the standard residential rate of $3.50 per $1,000 of valuation).
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.
The Caldwell administration did not oppose the resolution, but city Budget Director Nelson 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 revenue.
Technically, the resolution leaves it up to Koyanagi, as budget and finance director, to decide what the "compromise" tax bill will be for each qualified homeowner’s claim.
But Jesse Broder Van Dyke, Caldwell’s spokesman, said late Wednesday that the mayor intends to assist all who qualified for an exemption by Sept. 30 and did not get one.
"Mayor Caldwell has directed BFS to give homeowners that are approved for relief the $3.50 residential property tax rate and BFS intends to do that," Broder Van Dyke said.
