Posted on: Monday, February 26, 2007
Homeowner tax relief on the table
Advertiser Staff
In the face of O'ahu's soaring home values, the City Council Friday proposed property tax breaks ranging from fatter exemptions to an absolute freeze on any tax increase for longtime homeowners.
Many of the proposals overlap and will almost certainly be weeded out as the city budget process continues.
Among proposals discussed by the council's budget committee Friday were bills that would:
Offer a one-time homeowner credit of $200 against property taxes owed.
Hitch property tax exemptions to the rise or fall in value of residential property. In effect, when total residential property tax values go up, so would the home exemption amount.
Increase the base homeowner tax exemption. For example, property is totally exempt today when it is worth no more than $80,000. The increase would totally exempt residential properties worth up to $120,000.
Substantially increase home exemptions for the elderly. Today, the exemption is $120,000 for anyone older than 65; under the proposal, the exemption would go as high as $160,000 for those 75 and older. Higher exemptions would apply to low-income homeowners.
Boost exemptions on real property taxes from $25,000 today to $50,000 for the disabled.
Cap real property tax assessments (upon which taxes are applied) according to the amount of time a homeowner has lived in his or her property. For instance, those who have lived in their home up to five years will see their assessed value increase by no more than 10 percent. Those who have lived in their home for more than 30 years would see no increase at all in their assessment.
Roll back assessed values of properties when appeals are not settled in a timely manner.
Some fiscal watchdogs are calling for simple decreases in tax rates, rather than a piecemeal approach that could hurt some residents while helping others.
"The easiest and most effective path to tax relief is for the administration and the City Council to lower the rates, period," Tax Foundation of Hawai'i president Lowell Kalapa told the council yesterday.
No action was taken on any of the bills.
Mayor Mufi Hannemann is expected to offer his own schedule of property tax relief measures as well.
