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HomeMy WebLinkAboutCOM 0275.001 2004-2006 05/13120D5 ©6:38 327-3538 REAL PROP. H,ONA pq;E a1 May 13, 2005 To Stacy Higa, Council Chair And all Council Members From: John Totten y PO Box 38451 B _ Walkoloa, HI 98738 Re: Real Property Tax Rates Attached please find testimony in reference to Real Property Tax Rates. Please circulate this testimony to all Council Members before the May 17th public hearing. I have worked as an appraiser with the Hawaii County Repl Property TaK Office since 1989. I wish to make it clear that this testimony is rrjy personal statement and does not reflect the position of the Department or any official position Included are three examples illustrating the perpetuatirwg disparity in our current real property tax structure. Please refer to the examples: Two components make up the real property tax amount, the assessed valuation and the tax rate. Presently, the tax rate ranges from 5.55 per $1000 of assessed valuation to 9.85 per $9000. An enlightened Council would try to provide tax relief for our local residents My suggestion is to sigrhificantly lower the tax rate for all properties with a continually occupied residential unit. Additionally the tax rate needs to be lowered for all vacant resid~ntiel properties logically, as assessments spiral upward the tax rate would adjusted downward Comm. No. ~ 7S Ref. To: Presea~.+r Re6: acre MAY 05/13/2005 08:38 327-3538 REAL PROP. KONA pgaE i I I Example #1 This example compares a property in the Homeowner Cl~ss to a comparable property not in the Homeowner Class Land Classfication Homeowner Improved Residential Ap~rtment or Ag 2004 Assessment Land and Building $150,000 $150,000 $1~Q000 Exemption 40,000 o p Net Assessment $110,000 $150,000 $1~,OD0 Tax Rate 5.55 per 1000 9 10 per 1000 9.8 per 1000 Tax Amount $610.50 $1365.00 1477.50 Effective for the 2005 tax year, most properties in the homeown~r class qualifi~ad for a rollback to the 2004 assessment with a maximum 3% ann I increase. Also for 2005, the home exemption amount has increased by an addi Tonal 20% of the assessed value to a maximum of $80,000. i Homeowner Improved Res. Apt ~r Ag 2005 Assessment Land and Bldg $154,500 $200,000 $20p,000 Exemption 70,900 0 ~ 0 Net Assessment $ 83;600 $200,000 $20p,00o Tax Rate (same as above) Tax Amount $463.98 $1820.00 $190 00 I estimate that less than 60°r6 of the ocwpied properties in the Clounty of Hawaii qualify far the homeowner class. This example illustrates a difference in real property taxes of approximately 400%. Far tvv often the burden) is paced on the person at the lowest economic end. 05/13/2005 08:38 327-3538 REAL PROF'. KONA P~uE 8 Example #2 This example compares a property in the Homeowner Class to a vacant parcel in the same neighborhood. ' Land Classification Homeowner Improved Residential Ap~rtment or Ag 2004 Assessment Land $1DD,000 $100,000 $00,000 Building 100,000 0 0 Exemption 40,000 0 0 Net Assessment $16D,000 $100,000 Tax Rate 5.55 per 1000 9.10 per 1000 9.8~ per 10~ Tax Amount $888.00 $910.00 85.00 Homeowner Improved Res. Apt qr Ag 2005 Assessment Land $103,000 $150,000 $15p,000 Building 103,000 0 ' 0 Exemption 81,200 0 0 Net Assessment $124,800 $150,000 $150,000 Tax Rate (same as above) Tax Amount $692.64 $1365.00 $1477.50 Approximately 20% of the taxable parcels countywide qualify for the homeowner class. Oftentimes a local family who would like to build but cannot afford to have owned a vacant parcel for many years. In contrast, their more a uent neighbors who have recently moved into their homes qualify for the homeowner class and the corresponding exemption and assessment cap. 05/13/2005 08:38 327-3536 REAL PROP. KONA PA,E 04 Example #3 This example concerns a property in the Homeowner Class in which the owner rents out a room. ; Land Classification Homeowner Imprv. Res. ~ Ag or Apt 2004 Assessment Land and Building $250,000 Exemption 40, 000 Net Assessment $210,000 Tax Rate 5.55 per 1000 9.10 per 1000 ~ 9.85 per 1000 Tax Amount $1165.50 Effective for the 2005 tax year, most properties in the homeown I r class qualified for a rollback to the 2004 assessment with a maximum 3% annul increase. Also for 2005 the home exemption amount increased by an addition 20°~ of the assessed value to a maxlmum of $80,000 for any property with home exemption. Homeowner Improved Res. Apt 4r Ag 2005 Assessment Land and Bldg $257,500 $290,000 $29 ,000 Exemption 91,500 98,000 9 ,000 Net Assessment $166,000 $192.000 $19 .000 Tax Rats (same as above) Tax Amount $ 921.30 $1747.20 $181 20 In this particular case the owner, due to economic reasons, has pecided to rent out a roam in her house and provide an affordable housing unit for a local resident. By so doing, she approximately doubles her tax bill. AYthough she retains her home exemption, she has lost the 3% cap and the talc rate associated with the homeowner class. Again, far too often the burden is paled on the person at the lowest economic end.