The City Council is poised to pass a bill that could offer property tax relief to more homeowners of any age who earn no more than $50,000 in annual income.

City Council Budget Chairwoman Ann Kobayashi has been striving for months to find tax breaks for residents who increasingly complain that soaring real-estate prices are making it hard for longtime residents to pay their tax bills.

The bill that moved forward yesterday would offer a county tax credit of up to 4 percent of the income of the owners listed on the property title as long as total income does not exceed $50,000. That would mean that a Palolo woman whose house is worth $500,000 — who is earning $50,000 a year — would end up with her property tax bill frozen at $2,000. That's because the credit would cap her tax at 4 percent of her income.

Kobayashi said the latest proposal would help to give a break to more than just the senior citizens who now benefit from tax relief. The bill is set to go before the full council for final approval on Aug. 10. It would take effect in the 2007 tax year.

Although the assessed value still would trigger the bill, the credit would reduce the amount due for those who meet the income requirement. So, in those cases, "your tax will be based only on your income," Kobayashi said.

City Budget and Fiscal Services Director Mary Patricia Waterhouse said the administration of Mayor Mufi Hannemann favors the latest proposal as a way to give much-needed relief. "We are supporting this as a compromise," she said.

Earlier, she had said a similar proposal could cost the city as much as $48 million in lost revenue. But yesterday, she said it's not yet clear what the financial impact would be.

Lowell Kalapa, president of the Tax Foundation of Hawai'i, called the measure "a step in the right direction."

He said it's hard to estimate how much the move could cost the city. For example, if only 300 to 400 people apply, it could cost less than $5 million, he said.

Council member Barbara Marshall said she remains wary that a big drop in revenue could prompt a move to raise taxes for other residents to make up the difference.

Retired educator Ron Kubota said he's glad to hear that the City Council yesterday came up with another proposal to offer some property tax breaks to homeowners stung by bigger bills fueled by rising real estate prices.

However, he doesn't think the latest plan will help his family.

Kubota, 63, lives in a three-bedroom, two-bath home in Mililani. In 2002 he paid $524 in property tax for the year, but this year's bill shot up to $1,224. "I don't mind it going up, but not double," he said.

He said his family's income goes over the proposed limit because his wife still works full time.

And as his tax bill soars, paying for a son's Mainland college tuition takes up their financial resources. "Our money is going there," he said.

Kubota would like to see a tax proposal similar to California's Proposition 13 that would allow the tax to increase by only a certain percentage each year.

"I really worry about how we're going to make that payment," he said.