Property taxes should take a slightly smaller bite from older property owners and those with lower-valued homes starting this time next year, thanks to a bill unanimously passed Wednesday by the County Council.
Bill 182 doesn’t change tax rates but would increase the value of property that would be taxed. The bill also adds two new categories for kupuna exemptions — 65 years and 75 years — while increasing the amounts exempted. The exemptions would be applied beginning July 1, 2023.
“Some of this is bringing it up to current times, current values,” said Hamakua Councilwoman Heather Kimball, the bill’s sponsor. “This is a progressive approach because it’s going to provide a greater relative benefit to folks with low to median income and values.”
Kimball said she brought the bill forward as an alternative to tax relief some property owners were asking for during county budget negotiations earlier this year. The age categories will automatically kick in for those property owners taking the homeowners exemption.
The bill totally exempts property under $50,000 in value from property taxes, instead of the current $40,000. That means the property owner would pay only the $200 minimum annual tax. For property over $50,000 in value, the homeowner exemption would be $50,000 rather than the current $40,000.
With the median home value at $517,000 approximately half the homeowners would get a 20% reduction in their taxable value, Kimball said.
The bill would cost just $1.2 million annually, she said.
Homeowners between 60 and 65 years old would get $85,000 of their property value exempted from property tax instead of $80,000.
Those between 65 years old and 70 years old would get a $90,000 exemption, a new category. Those 70 years old to 75 years old would get a $105,000 exemption, compared to the current $100,000. And those 75 years and older would get $110,000 of their property value exempted.
The sole testifier on the measure urged the council to pass it.
“I think this is an important bill because it provides relief for those on fixed income such as myself,” said Raymond Keelan. “I don’t think it is an extraordinary request.”
In other action, the council also passed Bill 186 on second reading, clarifying rules for kuleana lands that qualify for the minimum tax.
Kuleana lands are those that were originally granted to Native Hawaiian tenant farmers between 1850 and 1855 that have since passed to their descendants.
Bill 186 allows applicants to submit documentation demonstrating that they are a family member of the person who received the original title to the kuleana land where such original title holder was previously granted a kuleana exemption for the subject property.
Currently, applicants must submit genealogy verification from the Office of Hawaiian Affairs or through a court order stating that the applicant is a lineal descendant of the person that received the original title to the kuleana land.
