Kokua Line: Residence owned by company might qualify for home exemption
Question: The city says property held in an LLC “may not” qualify for a home exemption. Does “may not” mean “cannot ever” or does it mean “might not,” depending on the situation?
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Question: The city says property held in an LLC “may not” qualify for a home exemption. Does “may not” mean “cannot ever” or does it mean “might not,” depending on the situation? If it is the latter, what do we do to make sure an LLC will be eligible for the home exemption? I called the number on the website and hung up confused.
Answer: “May not” means “might not” in this context. As for you second question, the city says you should consult a lawyer or other professional for specific advice.
You are referring to information on the website of city’s Real Property Assessment Division, specifically a section about qualifying for a home exemption, which reduces the taxable value of a residential property for owner-occupants on Oahu.
The website, found at 808ne.ws/faq, states that “Property held in a company, such as an LLC, may not receive a home exemption. Call our office at (808) 768-3799 for more information.” LLC stands for limited liability company.
You said you called but couldn’t understand the city’s explanation. We followed up with RPAD, which offered the following response:
“A property owned by a corporation is ineligible for a home exemption under ROH Sec. 8-10.4 (a)(2)(A). However, if the corporation complies with ROH Sec. 8-10.5 (a)(2)(3), a home exemption could be granted.
“The Real Property Assessment Division (RPAD) provides general information regarding real property tax assessments. RPAD does not give legal or other professional advice, and persons with specific inquiries regarding ownership, real property tax law and the appraisal process are urged to consult with an attorney or appropriate professional.”
We checked the sections of the Revised Ordinances of Honolulu that RPAD cited, which you can read at 808ne.ws/rohch8.
ROH Sec. 8-10.4 (a)(2)(A) states that “no such (home) exemption will be allowed to any corporation, copartnership or company.”
ROH Sec. 8-10.5 (a)(2)(3) is longer, and describes numerous requirements for a leased property to qualify for a home exemption, including that the lessee pay all the taxes and live there at least five years. Presumably, property held by an LLC that is leased in accordance with that section could qualify for the home exemption, but you should consult a legal expert, as the city said.
Kokua Line is using this space to try to reach a reader who has mailed us increasingly despondent letters but never includes any name or contact information — which leaves us helplessly unable to respond.
To this reader, we say: We would love to help you find a social-service agency, church or program that might be able to help, particularly one focused on assisting senior shut-ins. So, please, mail us another letter (we’ll recognize your distinct writing style and font), but this time include your name, address and phone number so that we can reach out.
Here is this reader’s most recent missive, a poem entitled “Why Lord?”:
“I don’t want to live ’til I’m 90. That means living another two or more years. Spending every day watching television. Just waiting for nightfall. Waking up the next morning. Nothing has changed. I ask God, why? He says, that is your destiny. Nothing can be added or taken away.”
In another letter the same reader expressed living on the verge of homelessness, barely able to meet basic monthly expenses amid Hawaii’s rising cost of living. Earlier letters spoke of being tempted to shoplift to save money on food.
Sadly, the financial desperation and acute loneliness this reader expresses may be familiar to more folks than many care to acknowledge. Kokua Line can’t solve all of these problems, obviously, but neither do we wish to ignore them.
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 email@example.com.