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August 7, 2024,9am.
Hawai'i County Building
To: Hawwai1Cmunky Council
Heather Kimball, Chair
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From: GrassrmmtInstitute wfHawaii -nc�
Jonathan Helton, Policy Researcher �
RE: BILL 174 — RELATING TO REAL PROPERTY TAXES
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Aloha Chair Kimball, Vice -Chair Inaba and other members of the Council,
The GrassrootInstitute ofHawaii would like tooffer its support for Bill 174, draft 1, which would modify
eligibility for the countv's homeowner property tax exemption by allowing homeowners to rent out portions of
their property without having to enroll in the affordable rental class.
Right now, homeowners renting backyard cottages or portions of their homes are technically ineligible for the
county's homeowner exemption unless they are participating in the County's affordable rental tax class, which
entails renting ataffordable rates asdefined bythe county code.
ThehonneovvnerexennpLiunreduceothetaxab|evo|ueofovvnepoccupiedhonoes6vbetvveen$5[LO0Dand
$150L000doUam. |talso enrolls the owners in a program that prevents their assessed values from increasing by
more than 3% each year, and gives them the lowest tax rate in the county, which for fiscal 2025 is $5.95 per
$1,0OOofassessed va|ue.z
We are unaware of homeowners losing their exemptions on the grounds that they were renting a portion of
their property, but island homeowners should not have to worry that this could happen to them.
If itwere tohappen, the effect would betodouble ortriple their tax bills, amounting tothousands ofdollars,
since they would lose their assessment caps and more than likely move into the county's residential tax class,
Grassroot Institute of Hawaii, June 9, 2024.
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which carries rates of$ll.1Oper $1,0X]Oofassessed value for the first $2million ofthe property's value, and a
rate of $13.60 on any portion of the property valued above $2 million.
We thank the Council for hearing this straightforward measure — which, by the way, would complement Bill
104 also being considered by the Council. That bill would establish a long-term rental property tax class that
could make it more attractive for property owners to provide long-term rentals.
Thank you for the opportunity to testify.
Jonathan Helton
Policy Researcher
Grassroot Institute of Hawaii
zusoBishop St. wsO8 Honolulu, x|esoza 808-864 z//6 info@mmssmntinstxute.ons