Friday, Sept. 22, 2023|
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Hawaii County might give Big Island farmers a break on their taxes under a new bill to be considered this week.
Bill 28, which will be discussed at Tuesday’s meeting of the County Council’s Finance Committee, would allow agricultural properties that also are used as primary residences to qualify for the county’s homeowner tax exemption.
“The homeowner class of properties gets the lowest property tax rate, and the tax rate can’t jump by more than 3% per year,” said Kailua-Kona Councilman Holeka Inaba, introducer of the bill. “Agriculturally zoned properties can’t claim their ag (tax) exemption and be in the homeowner class at the same time.”
Inaba said that because property taxes on some nonresidential properties have jumped by as much as 40% over the last several years, the bill would provide protection for Big Island farmers from a hefty tax burden.
“We want to allow our ag folks to keep being able to work,” Inaba said.
Currently, county statutes specifically exclude from the homeowner class all property dedicated to an agricultural use. The bill would remove that language, adding a clause that allows property used for agricultural purposes to qualify under the homeowner class, as long as the property owner’s primary residence is on that property.
Along with property owners, the bill also would extend consideration to renters. Where the law currently excludes properties used for agricultural purposes from being considered under the affordable rental housing class — which has the same tax rates as the homeowner class, Inaba said — Bill 28 would allow that tax class to include rental properties featuring agricultural uses.
Inaba said he worked closely with county attorneys and the Real Property Tax Office to develop the bill.
Inaba said there have been similar efforts in the past by the County Council to alleviate tax pressure on farmers, including bills that would offer a one-time tax credit, or measures to reduce tax rates on agricultural properties.
“I think the bill’s success depends on what the council’s feelings are on tax rates,” Inaba said, adding that he is unsure whether other counties have tried similar measures.
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