honoluluadvertiser.com

Sponsored by:

Comment, blog & share photos

Log in | Become a member
The Honolulu Advertiser

Posted on: Saturday, December 15, 2001

Higher property values could mean higher taxes

By Kevin Dayton
Advertiser Capitol Bureau Chief

City estimates of property values on O'ahu have increased for the first time since 1994, which could translate into higher property tax bills for many homeowners this year.

Caroll Takahashi, director of the city Department of Budget and Fiscal Services, said total assessed property values on O'ahu increased by 4.7 percent to a total of $89.1 billion this year.

City officials attributed most of the increase in property values to renovations of existing homes or new construction, but city statistics also show existing properties increased in value over the past year as O'ahu's real estate market warmed up in some neighborhoods.

That was particularly true in East Honolulu and Windward O'ahu, which showed average overall property value increases of almost 8 percent, but only modest increases in the number of new buildings appearing on the tax rolls.

City tax bills are calculated by multiplying the taxable value of land and improvements by a tax rate. Those tax rates are set by the City Council each spring, subject to the approval of the mayor.

When overall property values go up, that means city tax collections and many property owners' tax bills will also increase unless the mayor and council act to reduce rates.

The city mailed out about 260,000 tax assessment notices to property owners Thursday and yesterday, and the notices should be arriving in most homeowners' mailboxes by today.

City officials struggled to balance the budget in recent years as property values declined on O'ahu, taking city tax collections with them. The tough economic times made it difficult politically to increase the tax rates to bring in more money, so city officials tried to make do with less.

The increase in property values announced yesterday may ease some of that pressure. If the council simply leaves today's tax rates as they are, the city will still collect more in taxes because of the increase in property values.

City spokeswoman Carol Costa said it is too early to say whether Mayor Jeremy Harris' administration will propose a change in property tax rates. The administration is scheduled to send a proposed budget to the council in March, and the council likely will approve any changes in the tax rates in May or June.

Most of the increase in property values since last year was in single-family homes, which surged in value by almost 7 percent to a total of $48.5 billion this year.

The increase in assessed values in the single-family home category alone was $3.1 billion, while the total increase in value for all kinds of properties, including single-family homes, totaled about $4 billion.

Overall property values increased in every area except for the Leeward Coast neighborhoods from Nanakuli to Makua, where they declined by about 2 percent despite about two dozen new buildings there.

Reach Kevin Dayton at kdayton@honoluluadvertiser .com or 525-8070.