Gathering Places
Gathering Places
Formula for gauging
property tax values
gouges homeownersOur property assessment has risen 36 percent during the past two years. In the last year alone, the assessment for our 43-year-old house has jumped by 40 percent without any improvements, while the year before it depreciated by 17 percent!
The city's appraiser tried to explain that the formula for assigning the amount is based on 100 percent of the market value. He first "guesstimates" what the overall property might sell for, based on recent sales in the area, then "guesstimates" the land value portion, and the remainder is dumped into the building portion, regardless of the condition of the home. There is no price-per-square-foot consistency in determining the value of the building.
How he can assign a potential value based on 100 percent of the market value when he hasn't seen the interiors or backyards of any of the homes being evaluating is mystifying. Home sale prices are based on many aspects, including electrical and plumbing work, landscaping and the home's interior.
Home values also can be skewed by wealthy investors paying more than the asking price as the Japanese did more than a decade ago. The city lacks any consistency by basing its assessments on 100 percent of a fluctuating market value.
Although I plan to file an appeal, the odds of winning are stacked against the ordinary citizen. How can we win when the appraiser has used his numbers-out-of-the-hat method on all homes in our area? He can easily justify his assessments by comparing other homes in the neighborhood, to which he also has assigned arbitrary values.
To worsen the homeowners' odds, ordinance 02-45 (last year's Bill 24) now conveniently states that a parcel's land, building and improvements will be determined as a single value, instead of separately.
And finally, if you want to appeal it will cost you, yet the city doesn't keep statistics on successful appeals. Diluting the citizens' power are the three avenues for appeals, each with its own fee ranging from $25 to $100. Why not consolidate and save the taxpayers' time and money?
Obviously, the city is trying to wring more money out of homeowners to make up for its own overspending habits. (Last week the mayor warned that property tax rates would be raised to address the budget deficit).
What if the United States goes to war and home prices drop, but no one buys homes in our neighborhood? Will the assessment still be based on the last overpriced home sale? What will the city do to overcome that tax shortfall? If wealthy foreigners start paying sky-high prices for homes, as the Japanese did, will the local homeowners be penalized for this with matching sky-high assessments?
The Real Property Assessment Division should get real, and realize most homeowners are not made out of money. It's a struggle to own a home in Hawaii. Perhaps the city should base its tax rate on a five-year average of home values. What it is doing now is shameful.
A.K. Carroll lives in Kailua.