HomeMy WebLinkAboutCOM 0027.002 2020-2022 January 4, 2021
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Hawaii County Council
25 Aupuni Street
Hilo, HI 96720
RE: Testimony on Comm 27: 2020 Annual Report: Real Property Tax Board of Review
Happy New Year Council Members:
I am here today to support an issue addressed by the Real Property Tax Board of Review in their Annual Report. The
members'recommendation is to"Repeal the Non-Speculative Residential Program." The Board, under Legislative
Matters, Item 1, starting on page 4 and ending on page 5 of this report, documented their rationale to repeal this
provision which became effective in 1992 and is governed under Sections 19-58.1 and 19-58.2, Hawaii County Code.
Prior to my retirement from the Real Property Division, I worked extensively on this program,from receiving applications
to processing rollback taxes when property owners breached the conditions of the program. A breach occurs when the
owner no longer occupies the property as a principal residence, such as selling the property, moving due to a job loss, or
an elderly passing away or moving in with relatives for caregiving.
This program was enacted to protect owners from large increases in assessment when property values drastically
increases, such as it did in 1990 when the lowest vacant land in Hawaiian Paradise Park was selling for$5,000 in early
1990 and the same property was selling for $20,000 by December of that same year. In 2004, the council passed an
ordinance with the same intent of protecting owners from large assessment increases. This new program limits the
increase in assessment to no more than 3%from the prior year's assessment. No application is required when the owner
has a home exemption on file and there are no rollback taxes if the owner no longer occupies the property as a principal
residence. Unfortunately, there was no provision in the 2004 law to cancel the non-spec program and move the
applicants to the new program without processing rollback taxes. There are over 40,000 properties in the 3% growth cap
program versus the 483 in the non-spec program.
It is important that the non-spec program be repealed by June 30 of this year. If not, the Real Property staff will have to
send out renewal letters to many of the 483 properties still in this program and the owners need to submit their renewal
applications by September 1. If they do not renew, next year's assessment will be the property's market value. Many of
these owners are in their 70's or even 80's but need to renew to avoid a market value assessment. Yet because of their
age, they may not be able to complete the 5 or 10 year commitment and rollback taxes may be due on those properties.
The solution is to repeal the non-spec program and move the 483 properties to the 3%growth cap program. I am
certain that the Real Property office has contingency plans to handle the transfer of those properties from one program to
the other.
Thank you for your time. I will be available to answer questions you may have concerning this testimony.
Sincerely,
WESLEY f'AKAI
1222-E Kaumana Drive
Hilo, HI 96720
(808) 961-4601
Comm. No. L�•Z'
Ref.To:
Ref. gate JAN - 6 2021