HomeMy WebLinkAboutREP FC 081 09/24/1986 1984-1988 OFFICE INFORMATION ONLY
Meeting: May 7, 1986
Action: Council Chr. deferred FC-81; report will be taken
up together with Bill 85 ,
Re:
410 REPORT OF THE 111
COMMITTEE ON FINANCE
Date: September 24, 1985
Place: Councilroom
Time: 9:00 a . m.
Chairman and Members
Hawaii County Council
Hilo, Hawaii 96720
Your Committee on Finance, to which was referred Communication 301
from the Subcommittee on Real Property Tax, reports as follows:
The purpose of Communication 301 is to report on the action of the
HSAC Real Property Tax Committee 's meeting of September 13 , 1985 , and
to receive comment from the Council on Proposals 82-HSAC-7, relating
to non-speculative residential use, and 84-HSAC-5 , relating to
deferred taxes.
The purpose of Proposal 82-HSAC-7 is to enable those owners who
qualify for the basic home exemption to dedicate their property to
residential use and defer their real property tax payments . Property
approved for non-speculative residential use shall be assessed
annually. The assessed value for tax purposes shall be the value of
the dedicated property at the time the petitionwasapproved and this
assessment shall remain constant throughout the dedication period.
Deferred taxes shall be the difference in the amount of taxes between
what would have been paid at the higher use and the amount paid based
upon its dedicated use. Deferral shall continue indefinitely until
such time that the property is sold, subdivided, or transferred to
persons other than a surviving spouse or heir , or the owner no longer
qualifies for a home exemption. At this time, deferred taxes would
become due with a 25% penalty. Deferred taxes and penalties shall
run with the property.
The purpose of proposal 84-HSAC-5 is to allow homeowners who are
eligible for multiple home exemptions to defer the entire or any
portion of their real property taxes that exceeds the tax of the
selected tax base year . This deferred tax will be a lien on the
property, bear interest, and become due and payable upon the transfer
of ownership. To qualify for this deferral payment , an individual
must be eligible for a multiple home exemption (elderly and
handicapped) and his income must not exceed the federal registers
poverty income guidelines by more than 150%. A surviving spouse who
jointly held the property as tenants by the entirety may apply for
continuance of the tax deferment.
FC REPORT NO, 81
ADOPTED:
411
FC-81 Page 2 September 24, 1985
During discussion of these items, it was announced by
Councilman Schutte that he is in the process of drafting a new
measure to allow for tax deferment. The measure would enable those
homeowners who qualify for home exemption to defer a portion of their
real property tax payments . The tax deferment amount shall be the
amount of taxes due in excess of the amount paid in the tax base
year . The base year shall be the year in which deferment of taxes
has been approved. The deferred taxes shall bear interest at a rate
of 8% compounded annually and a 25% penalty shall be imposed in the
event of sale or transfer of the property to someone other than a
surviving spouse or heir .
Your Committee on Finance recommends that the HSAC Real Property Tax
Committee file Proposals 82-HSAC-7 and 84-HSAC-5 and informs that
since tax deferment does not require uniformity, the Committee on
Finance will be pursuing the new measure proposed by
Councilman Schutte. The Committee further recommends that this
report be forwarded to the HSAC Real Property Tax Committee upon its
adoption by the Council .
AAUJLLLLi rLJ
FRANK DE LUZ III CHAIRMAN
OR INE morTcHAKu, VICE CHR. JAMS ` L. K. DAHLBERG, MEMBER
TAKASHI DOMINGO, MEMS: `, ' 4ELL S. KOKUBU , MEMBER
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ME E K. LAI, Of �E` C'R K. SCHUTTE, MEMBER
LA/MS/CRB