HomeMy WebLinkAboutCOM 0677.012 2022-2024Ashley L. Kierkiewicz
office: (boa) 961-8265
Council ,Member-
Fax: (808) 961-8912
District 4 Puma
ashley.kierkielvicz a hass,caiicou�ety,gov
COUNTY CLERK
COUNTY OF HAWAI'I
RECEIVED
Dale
HAWAI`I COUNTY COUNCIL
Hawaii County Building
2511upuni Street • Hilo, Hawaii 96720
DATE: July 5, 2024
TO: Heather Kimball, Council Chairperson
And Members of the Hawaii County Council
FROM: iq 'Ashley L. Kierkiewicz, Council Member
RE: Real Property Tax Comments on Bill 123
Please see attached comments from the Real Property Tax Office regarding how Accessory
Dwelling Units would be taxed based on how Hawaii County Code Chapter 19 is currently
written.
AKlak
Comm, No.
o 4ij, 11
Serving the Intef•ests oj'the People of Out- Island Ref. To:
Hawaii County is an Equal Opporiunfly Provider- and Employer 2024
Ref. Date— �U�.,,_ 5.
Mitchell D. Roth
Mayor
Deanna S. Sako
Managing Director
Diane Nakagawa
Finance Director
Aaron K.H. Brown
Deputy Director
County of Hawail i
DEPARTMENT OF FINANCE - REAL PROPERTY TAX
Aupuni Center • 101 Pauahi Street Suite No. 4 • Hilo, Hawai'i 967204224 • Fax (808) 961-8415
Appraisers (808) 961-8354 Clerical (808) 961-8201 • Collections (808) 961-8282
West Hawaii Civic Center • 74-5044 Ane Keohokalole Hwy. • Bldg. D, 2nd Flr. • Kailua Kona, Hawaii 96740
Fax (808) 327-3538 • Appraisers (809) 323-4881 • Clerical (808) 323-4880
July 3, 2024
To: Chair and Presiding Officer, Ashley Kierkiewicz
Vice Chair, Holeka Inaba
Members of the Policy Committee on Planning, Land Use and Development
From: Lisa Miura, Real Property Tax Administrator
Keita Jo, Assistant Real Property Tax Administrator
County of Hawaii
Subject, Comments on Bill 123
Real Property Tax would like to comment on Hill 123 specifically in regards to how the addition
of an Accessory Dwelling Unit (ADU) would be taxed based on how the Hawaii County Code
Chapter 19 is currently written.
The concern, from a Real Property Tax perspective, is if an owner of a property is receiving the
homeowner exemption and homeowner tax class then building an ADU even for a long term
rental could increase property taxes on the parcel considerably. In order to retain the
homeowner tax class then the owner would need to apply for the affordable rental program for
the ADU. In order to qualify for the Affordable rental program, the homeowner would need to
be 1) legally permitted and 2) utilized as an affordable rental (which requires an application each
year and the rent be kept below the maximum allowed under the program). If the homeowner,
rents the ADU on a long term basis (which currently for real property is 180 days or more) and
does not apply for an affordable rental program, then the owners would lose the homeowner
tax class (similar to having any rental activity of less than 180 days).
To clarify, in order to incentivize homeowners (who reside on property and receive the
homeowner tax class) to do long term rental of the ADU, County Council would need to update
the county code as it pertains to real property tax. Otherwise the increase in real property tax
will not encourage renting of the ADU on a long term basis. The Real Property Tax Division has
received many comments that the State's tenancy rights already make it difficult for
owners/landlords thus they believe it would be better in terms of their real property tax bill to
keep the area vacant or just allow for family use if the code pertaining to real property taxes is
not updated.
Please keep in mind when the real property tax code was codified over 40 years ago, short term
rental was not what it is today. There was probably no understanding of how bad our housing
shortage for the middle to low income working class would be today. If it is the will and intent of
the County Council (and Administration) to support long term housing on properties where the
owner resides, we recommend a review of Chapter 19 as it pertains to the homeowner
exemption and homeowner tax class program.
Haivai'i County is an Equal Opportunity Provider, and Employer