Big Island tax plans
would ease burden
on homeowners
HILO >> Some Big Island homeowners could save an average of $100 a year in taxes starting next August under three bills introduced by Mayor Harry Kim, Hawaii County officials said.
County Finance Director William Takaba said the goal of the bills is to counter raising land values.
"We know something needs to be done," he said. "This is the time to do it."
The County Council's Finance Committee is set to review the bills when it meets Tuesday. The measures include:
>> Adding to the minimum $40,000 exemption available to about 32,500 owner-occupied properties.Kim said adding to the exemption would help those who need it the most.>> Limiting increases in county-assigned assessments to 3 percent a year for 28,889 homeowner-class properties.
>> Reducing the number of years a homeowner must keep the property to take advantage of a program that freezes their property value from 10 to five years.
"We believe that this new exemption will provide needed relief to most homeowners on the Big Island, particularly younger or lower-income families living in areas with rapidly increasing property values," Kim said in a letter accompanying the bill. "It also will assist older homeowners on fixed incomes living in similar areas," he added.
The savings would stop on homes valued at least $400,000, which the administration considers the upper end of middle-class homes, Takaba said.
Without the 3 percent cap in property assessments, there is estimated to be a roughly 11 percent jump in values from last year's values, he said. The county is expected to lose $2.75 million per year in taxes if the exemption and the assessment take effect. However, revenue from new construction should offset the loss, Takaba said.
Kim's final proposal seeks to attract more homeowners to a program that freezes property values for 10 years. About 1,000 homeowners now participate in the program, but many eligible homeowners have avoided the program due to the long dedication period and the tax penalty for breaking the voluntary agreement, Kim said in letter to the council.
Kim is proposing to shorten the dedication period to five years.
