A bill to create a new property tax class for owner-occupants is being held up in the City Council's Budget Committee as members try to find ways to make it more palatable to opponents.

Bill 51-09 was introduced by Mayor Mufi Hannemann, who argues that owner-occupant households are more likely to have fixed or low incomes.

But opponents, including some council members, believe that creating an owner-occupant class for property taxes would make it more politically expedient for elected officials to pass tax rate increases on to businesses and people not living on their own properties, and also to renters.

To address the latter problem, the administration said it is proposing a change in state laws offering a tax break for renters.

Budget chairman Nestor Garcia yesterday called for the bill's deferral after Councilman Donovan Dela Cruz asked if his colleagues and the administration would consider some changes.

Dela Cruz cited a bill he and Councilwoman Ann Kobayashi introduced in 2007 that also would have created an owner-occupant tax class, but limited it to households with incomes of no more than $70,000.

Councilmen Ikaika Anderson and Charles Djou pointed out that there are already ways to provide tax relief to the most needy, including a tax credit offered to owner-occupant families making no more than $50,000. All owner-occupants, regardless of income, also can apply for an exemption of $80,000 off their property valuations — more for seniors, depending on their age.

How much property owners pay is determined by multiplying a property's valuation by a tax rate that varies by class.

Two other property tax-related measures were approved by the committee yesterday and will go to the full council for the second of three approvals.

One would give tax exemptions to property owners who offer rentals at "affordable" rates, under federal guidelines. The other would make changes to homeowner exemption requirements and increase the penalty for failing to comply.