Thursday, August 27, 2009

New Property Tax Bill will Affect Hawaii Kai Homeowners

O'ahu property owners who provide housing to low-income families would get substantial tax breaks under a bill approved by the Honolulu City Council. Councilman Donovan Dela Cruz said he proposed the measure as a companion bill to a plan by Mayor Mufi Hannemann to create a new property tax category for people who live in the homes they own. Dela Cruz said both owner-occupants and low-income renters need to be sheltered from the possibility of high property tax rates.

Opponents say the measure gives city officials a more politically convenient way to pass property tax increases on to businesses and property owners in other classifications.

City budget director Rix Maurer III said the city is anticipating a deficit in the operating budget of between $145 million and $150 million. Mayor Mufi Hannemann has said he is committed to ensuring that owner-occupants need not pay more next year despite falling property values and revenues.

Several council members asked why the city needs to have both an exemption and a separate classification for owner-occupants. Noting that the other three Hawai'i counties have a tax classification for owner-occupants, Maurer said, "I think it's prudent that we have as many tools as we can."

The measure now goes back to the Budget Committee. At the Wednesday meeting, the council gave the first of three approvals for what's being called a companion bill that would give tax exemptions to owners of affordable rental properties.If you have an opinion about this tax measure, contact your council member now.

Barbara Abe, Realtor

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