HomeMy WebLinkAboutCOM 0926.028 2018-2020 The first reading of the proposed additional property tax on houses assessed over$2 million
for non-owner occupants takes place today.
Currently, this classification is called Residential (non-owner occupied) and is $11.10 per
$1000. Councilman Aaron Chung from Hilo and the Mayor are proposing it be over $14 per
,$1000, more than double the Homeowner rate of$6.15.
There are presently 2,484 properties that fit the profile for this new County property tax.
However, the breakdown of locations is worthy of note. East Hawaii has 146 or 6% of the
total. That leaves the other 2,338 or 94% in West Hawaii. A tax that disproportionately affects
one side of the island more than the other. It was proposed by a council member from the side
least impacted... hmmm. West Hawaii already accounts for over 70% of the property taxes
collected on the island.
Second, homeowners who do not rent out their properties should be prized in Hawaii. They
use few County services, but they do use gardeners, housekeepers, pool guys, restaurants, stores,
etc. and generate income for our residents all year round. They are the backbone of our property
tax revenue stream and rarely fail to be able to pay. When viruses, hurricanes, and economic
downturns come, they are not usually buffeted by the fickle finger of fate like those who are
paycheck dependent. We should be encouraging them to buy,not discouraging them with higher
taxes for services they will never use, thereby freeing up more for others.
I believe if your property is income-generating, then you should pay higher property taxes
than owner-occupants and pass the extra on to your tenants, which is how it is currently set
up. You make money, the County makes money. The state equalized the difference between
long and short term years ago with the TAT collection on short term, so no need to split those
into two categories.
But there does need to be a new one for true second homes that are not rented out. If we
want to create a new kind of tourism to carry us through rough economic waters with little impact
to our day-to-day lives, I can't think of a better group of people than second homeowners in all
price brackets who spend money all year round here regardless if they are here or not. We should
make a big deal about how we want them to buy here so we gave them a great tax rate to do that.
Less traffic then vacation tourists, less use of our parks and beaches, less use of our services and
more money consistently in the pockets of working residents without the economic interruptions
we seem to consistently have now with vacation tourism.
You can see from the graphs below that sales are dramatically dropping, and pending
sales are down as well... the only thing going up is the available inventory. This could lead to a
housing crisis down the road and adding more taxes to these and other properties is not the
solution to the budget shortfall.
COUNTY CLERIC
COUNTY OF HAWAII
Gretchen Osgood RECEIVED
Time VV OLA HY
Date. MAY 1 3 2020
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