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The Honolulu Advertiser

Posted on: Monday, February 11, 2002

Landowner appeals spike to 8-year high

 •  Property tax assessments: Science or speculation?

By Robbie Dingeman
Advertiser City Hall Writer

The number of people who are appealing the city's assessment of their property values rose this year to 4,474, higher than any year since 1994.

In addition to house and condominium owners, appeals are coming from the owners of more than 2,600 pieces of property, from farms to industrial plants to hotels.

"This is about typical for a year with an increase," said Gary Kurokawa, real property assessment administrator. "In an up market, this is pretty much what to expect."

He said people who own condominium units are sometimes shocked to see the city assess the property at the total value, even if the owner doesn't own the fee and is paying a lease. It's not unusual for the city to assess a leased condominium at $250,000, for example, while the bank says it's worth $125,000.

Kurokawa said many leases require that the lessee pay the property tax, which can be confusing to owners of single units when they are paying tax on land they don't own. "They see that bank assessment and they just can't understand the difference," Kurokawa said.

From the city's standpoint, it makes sense to view the property as a whole, because it would be too complicated to determine each property owner's share of the actual value. "We would have a nightmare," Kurokawa said.

Generally, assessors say condominiums are easier to appraise, because so many units are similar. Sometimes entire buildings appeal, creating a spike in the number of appeals. Some condominiums also end up classified as hotels, which boosts that number as well.

Kurokawa said there were 2,576 appeals by property owners in 2000. About two-thirds of those resulted in a reduction.

Some homeowners believe the appeal process should be shortened and made less complicated. Some also object to the city's practice of correcting only the amount of tax for the year the appeal is made, which means some homeowners file an appeal every year.

"It's not our fault that the appeal process is long and that it overlaps into the next year," said Susan Wong of Maunalani Heights. "Especially if how they're computing it is incorrect."

Kurokawa said the city will correct a mistake in the description of the property, but it cannot go back and change taxes paid for years past if no appeal was filed.

"We need to balance the budget," Kurokawa said. "if there's no statute of limitations on the corrections, there's no way the city can run."