HomeMy WebLinkAboutCOM 0817.065 2008-2010Murashige, Laura RES. j,3q-10 / J U M. NO. 817
From: Bruce Brooks [bruce @bbkona.com]
Sent: Sunday, May 16, 2010 7:03 PM
To: counciltestimony @co.hawaii.hi.us
Cc: cohmayor @co.hawaii.hi.us
Subject: Comments on proposed Property Tax increase on rental property in Hawaii County.
Aloha Hawaii County Mayor and Council Members,
I think I understand the need to address the budget shortfall. We are all feeling the pinch of the weak economy
and must make sacrifices. However, I feel the effects of increasing the taxes on rental property needs to be
considered carefully.
Rental property is already the highest taxed property for several reasons.
1. Higher property tax rate $8.10/1000 vs. $5.55/1000 for owner occupied.
2. GET paid on rentals -- 4%
3: TAT paid on short term rentals -- currently 8.5 %, soon to be 9.5%
An Example: A property assessed at $500,000 renting for $2000 a month will pay
$4050 /year in property tax (pre increase)
$960/ year in GET
$2280 /year in TAT if rentals are for less than 6 mo.
Total taxes paid to Hawaii state and county would be $7290/yr ($608 /mo.) before the proposed increases!
The same owner- occupied property would pay a total of $2775/yr.
Do rental properties get almost three times the government services of an owner - occupied property ? ??
It is wrong to assume that these taxes on rental property are all paid by people who don't live /vote here.
1. Many rentals including mine are owned by local residents. We bought them as an investment to
supplement our incomes and actively manage and maintain them. We vote here and pay the taxes!
2. Many people who rent here are residents of Hawaii too! They vote here too!
3. Given the current economic situation with lower occupancy and lower rental rates we are not able to
pass these increases along to renters. It comes out of our income.
4. The reduced cash flow from rental property may have the unintended consequence of forcing more
property into foreclosure, further lowering property values, or both -- both of which result in reduced
tax revenues.
I hope you will consider carefully before putting this increased burden on what are already the highest taxed
properties.
Bruce Brooks
76 -6386 Pualani St
5/18/2010
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Ref. Dote ,11114 0 7 '2.011