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Homeowner investors face higher taxes with new law


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POSTED: Saturday, October 31, 2009

Landlords, investors, speculators and other property owners who do not live in their properties could face a separate, higher tax rate than owner-occupants under a bill signed into law by Mayor Mufi Hannemann.

The administration says the new “;homeowner”; tax class is needed as a tool to help address a budget deficit of about $140 million next fiscal year.

Under current law, owner-occupants pay the same rate—$3.42 per $1,000 of property valuation—as nonowner occupants.

Raising the rate on nonowner occupants would bring in more tax dollars while protecting true homeowners, Hannemann said at a signing yesterday.

“;In having a separate class we're really addressing those folks, in my opinion, who have the ability to pay a higher rate,”; he said.

Rates would ultimately be set by the City Council, but the mayor would be able to pitch his proposed rates.

“;At this point in time, I don't want to venture a guess on what it's going to look like,”; Hannemann said.

Opponents of the measure say it could lead to higher rents and higher taxes on commercial, agricultural and other properties.

“;The Honolulu City Council adopted a bad public policy that will result in tax increases for all the residents of Honolulu,”; said City Councilman Charles Djou, one of the most vocal critics of the separate class.

Bill 51 had been shelved by the City Council at its meeting Tuesday, but it was revived after Hannemann convinced Chairman Todd Apo to change his vote.

Yesterday he also signed into law Bill 61, which eases restrictions on churches and other community groups that wish to establish meeting facilities in districts zoned for industrial use.