HomeMy WebLinkAboutCOM 0600.036 2022-2024 P/FG
t5ilt loL4
Gomm. (moo
From: Marilyn Johnson
Sent: Monday, February 5, 2024 11:39 AM
To: Council Testimony
Subject: Bill 104 testimony for Committee on Finance °tee
m
—4-g
I support Bill 104 that creates a Long Term Rental class. Without this,there is essentially a property tax penalty fait-)
owners who add an ADU to their property for the purposes of a long term rental. -'
A couple comments about how the draft 4 is written: ..
First concern:
I think there a conflict between two statements, or at minimum some confusion due to a missing definition or poor
wording choice.
Section 4(k) (2) states:
"All dwelling units on long-term rental properties must be leased"
The definition of a "dwelling unit"from Chapter 19 article 1 section 19-2 is:
""Dwelling unit" means one or more rooms designed for or containing or used as the complete facilities for the
cooking,sleeping, and living area of a single-family only and occupied by no more than one family and
containing a single kitchen."
Therefore, I would assume that my principal residence could also be defined as a "dwelling unit", and as such, if I had
both a long term rental ADU and my primary residence on one TMK, it would not be eligible for the Long Term Rental tax
class.
However, point(3)states:
"...shall not be disallowed or ineligible by sole reason that the owner's principal residence is location on the
same property."
There is no definition of"principal residence" in Chapter 19.
It seems at minimum "principal residence" should be defined in Chapter 19 article 1 section 19-2.
Because I don't really understand the intent, I cannot offer a suggested rewording. Is the point that the Homeowner and
Long Term Rental classes will be pro-rated based on the value of the various dwelling units if both are present on one
TMK? Is the intent there cannot be a mix of STVR and Long Term rentals on one property?What about cases where
property managers and staff are provided long term housing on the property that also contains one or more STVR?
Second concern:
Section 4(k) 1 requires the dwelling unit to be occupied for 12 consecutive months, and lease for six consecutive
months.There should be some exception to allow for vacancies during dwelling unit upgrades and maintenance, or else
the quality of long term rental dwelling units may be impacted because owners are unwilling to pay extra property taxes
during a remodel. My assumption is that a vacant dwelling unit may be taxed at higher"Residence" rate rather than
"Homeowner", even if the owner's principal residence is on the same TMK.
Third concern:
After the Lahaina disaster,there seems to be a push to have residential properties owned by Hawaii residents rather
than non-residents. Should this tax class only be eligible if the property owner is legal Hawaii state resident or business
1 Comm. No. ! ( �
Ref. To: irr
Ref. Date ; t_:A - 6 �.
entity?Or does it not matter because income tax is changed based on where the rental is located, and not where the
owner lives.
Thank you for considering my comments.
Marilyn Johnson
Kehena Beach subdivision, Lower Puna
2