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A subcommittee of the City Council has taken on the task of providing relief to property owners on Oahu who have been affected by a significant increase of approximately 10% in real property tax assessments. Their focus is on updating real property tax homeowner exemptions and adjusting the income eligibility threshold.
The subcommittee, known as the Permitted Interaction Group (PIG), consists of Chair Tommy Waters, Vice Chair Esther Kia‘aina, Radiant Cordero, and Matt Weyer. They have evaluated various potential real property tax bills and have identified several options to address the issue. These options include long-term rental classifications or exemptions, modifications to real property tax credits, changes to homeowner exemptions, and amendments to real property tax rate classifications.
The main goal of the subcommittee is to provide a tax break for local residents and ensure that they can afford to stay in Hawaii and keep their homes. Chair Tommy Waters expressed this sentiment during a special PIG meeting on June 7.
Due to state legal requirements, the full Council cannot officially discuss the subcommittee’s report until their next meeting in July. Nevertheless, the subcommittee has narrowed down its preferred actions, which include updating real property tax homeowner exemptions and the income eligibility threshold for the real property tax credit.
To achieve this, the subcommittee wishes to bring two measures, Bill 37 and Bill 40, introduced by Esther Kia‘aina in 2022, for third and final readings. Bill 37 proposes increasing the income eligibility threshold from $60,000 to $80,000 for the real property tax credit. Under this measure, eligible individuals would see their tax capped at 3% of their income, providing significant relief for low-income earners.
Similarly, Bill 40 aims to increase the homeowners exemption from $100,000 to $120,000 and raise the senior exemption from $140,000 to $160,000. These changes would benefit all homeowners but have a particular focus on ensuring the well-being of kupuna, or elderly residents.
Chair Tommy Waters emphasized that the current PIG would temporarily dissolve until another similar panel is created to further review the proposed tax relief measures. The dissolution is necessary to progress with Bill 37 and Bill 40, ensuring their implementation next year.
If approved, the city plans to send public notices to inform residents about the new laws. This will enable individuals to file for exemptions and apply for the low-income tax credit.
During the subcommittee meeting, members of the public also voiced their support for tax relief measures. Choon James highlighted the importance of helping local residents stay in Hawaii and avoiding gentrification.
The full City Council is expected to convene again on July 12 to further discuss these proposals.
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