Allow owner-occupants of Residential A homes to apply for missed property tax relief

from Grassroot Institute of Hawaii, October 4, 2023

The following testimony was submitted by the Grassroot Institute of Hawaii for consideration by the Honolulu City Council on Oct. 4, 2023.
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October 4, 2023
10 a.m.
Honolulu City Council Chambers

To: Honolulu City and County Council
      Councilmember Tommy Waters, Chair
      Councilmember Esther Kiaʻāina, Vice Chair

From: Grassroot Institute of Hawaii
           Ted Kefalas, Director of Strategic Campaigns 

RE: RESOLUTION 23-243 — RELATING TO REAL PROPERTY TAX COMPROMISES 

Comments Only

Dear Chair and Councilmembers:

The Grassroot Institute of Hawaii would like to offer its comments on Resolution 23-243, which would give property tax relief to owner-occupants who failed to file for a homeowner exemption in 2022 and whose homes were taxed at the Residential A rate as a result. 

The Institute supports this resolution and appreciates that it is even being considered. However, we also would like to see it paired with additional reforms that I will mention in a moment 

The background of this proposed resolution is that more than 9,000 properties moved into the Residential A tax classification for fiscal 2024, bringing the total for the tax year to more than 29,000 Residential A parcels — as the “whereas” clauses in this measure note.

But because the Residential A class carries a much higher rate than the Residential class, owners of newly Residential A properties are facing significantly higher tax bills this year. 

This measure attempts to mitigate those increases by allowing owner-occupants who failed to file for homeowner exemptions by October 2022 to retroactively file for such exemptions by Nov. 17, 2023, thereby lowering their tax bill for the current year.

The Institute believes this measure will help many Oahu homeowners. For example, the owner-occupant of a $1.4 million house could save more than $4,000 in taxes, if retroactively taxed at the Residential rate with a $100,000 homeowner exemption. 

This resolution as proposed is truly a good idea and, again, we thank the Council for considering it. However, the resolution could be even better if the Council also would:  

>> Exempt long-term rentals from the Residential A tax class and create a new class specifically for such properties.

>> Sort non-owner-occupied and owner-occupied properties into separate classes. 

These changes would compliment the resolution’s intent and further improve Honolulu’s real property tax system. 

Thank you for the opportunity to submit our comments. 

Sincerely, 

Ted Kefalas
Director of Strategic Campaigns
Grassroot Institute of Hawaii