Property values on Oahu rise about 6%

The total assessed value of taxable property on Oahu rose 6.1 percent over last year, a slightly smaller jump than a year ago, city officials said Friday.

Real property assessment information for 2016 is being sent Tuesday to the owners of Oahu’s roughly 295,000 private properties. The value of a property, multiplied by a rate set each June by the City Council, forms the basis of a property’s annual tax bill.

Overall, the value of all Oahu taxable property rose to $227.9 billion, up from $214.89 billion, the city’s Real Property Assessment Division reported. The 6.1 percent increase is slightly less than the 7.1 percent rise in 2015.

All classifications of property and all nine geographic zones saw increases in value from a year ago.

Gary Kurokawa, the city’s deputy director of budget and fiscal services, said new development on the island is a major reason for the higher values. Finished projects that added value to the overall base included both new buildings and improvements to existing structures, from residential subdivisions and condominiums to commercial and industrial projects, he said.

The expansion and renovation of Ala Moana Center, by itself, added $242 million in value, while the new Laulani Shopping Center in Ewa Beach added $141 million, the city said. The International Market Place project in Waikiki added $46 million, and the new Kailua Target store added $20 million. The sale of the Waikele Shopping Center and Outlets added $70 million, while the sale of the Mililani Town Center added $46 million. There was another $45 million in smaller projects.

There was also $83 million in so-called reclassifications, by which residential properties become commercial — for instance, a mixed-use condo that is converted into a hotel.

Overall, commercial property values increased by 10.4 percent.

Without the estimated $610 million in total new construction and re-valuations, and the $83 million in reclassifications, the increase in the commercial class would have been only 6.7 percent, tax officials said.

Residential properties, which represent the largest source of property tax income for the city, saw values increase to $183.36 billion from $174.52 billion, an increase of 5.1 percent.

Hotel and resort property values increased 14.6 percent, the highest jump among the various property classes. Industrial property values increased 7.3 percent.

By area, the overall value of residential properties (both residential and residential A classes) jumped at least 3.6 percent in eight of Oahu’s nine zones.

The exception was East Honolulu, which saw only a 1.4 percent increase. The zone includes the largest number of high-end properties on the island.

“That market is not as strong as the lower- and medium-value properties,” Kurokawa said. “The high-end (market) has kind of leveled off. They were the first ones out of the gate, and I think they’re the first ones to kind of plateau. There are some properties that might have even gone down a little bit.”

Meanwhile, the biggest increases were in southern Windward Oahu (8.4 percent) and Leeward Oahu (8.1 percent).

The higher residential values helped push about 1,200 properties into the residential A category from the standard residential class. Residential A properties, by definition, are those residential parcels valued at $1 million; they don’t have a homeowner’s exemption. Residential A properties, which make up about 9,700 of the island’s 250,000 residences, are taxed at $6 per $1,000 of assessed value, while standard residential property owners pay $3.50 per $1,000 of value.

The assessments are based on sales and new valuations through June 30, and will be used to help determine amounts for the 2016 bills due Aug. 20 and Jan. 20, 2017.

Tax officials repeatedly emphasize that increases and decreases in valuations for overall zones and classifications represent average changes only and that the values of individual properties might vary widely.

Property owners have a month to file an appeal of their assessment with the city, from Tuesday to Jan. 15. For information about filing an appeal, go to realpropertyhonolulu.com.

City officials say tax assessment notifications should appear in mailboxes Wednesday or Thursday. They will also be available online beginning tonight at the city’s property tax information site at qpublic.net/hi/honolulu. Or, call 768-7000.