West Hawaii homes
filling county coffers21 percent of Big Isle
property taxes come
from the resort region
KAILUA-KONA >> Expensive new West Hawaii homes and lots are giving a major boost to Hawaii County's tax revenues, a private study shows.
Although the properties represent about 1.7 percent of the 134,295 parcels on the Big Island tax rolls, they generate more than 20 percent of the county's property taxes, according to the study prepared for the Hawaii Leeward Planning Conference.
A total of 2,281 homes and lots at West Hawaii resorts pay $22.2 million a year in Hawaii County property taxes, the study says. That's 21 percent of the property tax total, estimated at $106 million at the end of 2002. By 2008, taxes generated by these upscale homes and lots are expected to increase to $48.9 million, Leeward Planning president John Ray told the Hawaii County Council recently.
The numbers were revealed in a study of resort homes and condominiums done by Decision Analysts Hawaii Inc. for the planning organization.
Regarding the purpose of the study, Ray said: "We really didn't have an agenda. We'd like people to recognize the benefits (of the resort homes)."
But he added that his organization wants the County Council to see how much tax money comes from West Hawaii in the hope that the council will spend more there.
An ongoing complaint from West Hawaii residents is insufficient infrastructure, especially the lack of adequate roads.
Police and fire services are also a concern, Ray said.
The study looked at eight resort areas from Hokulia in Kona to the Mauna Kea Resort in South Kohala.
The average value of residences used as vacation or second homes, which is the major use, is $2.9 million, said Bruce Plasch of Decision Analysts. Their taxes average $27,800 per year.
The average value of owner-occupied homes is $2.5 million, Plasch said. They pay, at a discounted rate, an average of $13,300 per home, he said. But there are few of them.
"About 10 percent of the homes and 4 percent of the condominiums are owner-occupied," he said.
"In comparison, a typical owner-occupant of a (non-resort) single family Big Island home pays less than $900 per year in property taxes," Ray said.
Purchasers of the resort homes may be put off if potential buyers consider property taxes too high, Plasch said.
But Councilwoman Bobby Jean Leithead-Todd said pensions are not taxed in Hawaii and there are no school taxes here.
"Compared to what they're paying on the mainland, it's still a bargain (here)," she said.
The $22.2 million in property taxes paid by the homes is nearly three times more than the $8 million per year paid by resort hotels, Plasch said.
The homes offer other benefits compared to the hotels, Plasch said.
The tax income from the homes is predictable, whereas income from the hotel room tax varies, he said.
Investors constructing new hotels typically bring in mainland contractors. Home builders hire local contractors, he said.
The type of owner, generally entrepreneurs, can also contribute to the island, Plasch said.
"It has already led to improved medical facilities in Waimea," he said.
