Council approves $350 rebate for owner-occupants and say they’re just getting started

It will come in the form of a one-time, $350 rebate.
Published: Jun. 8, 2023 at 8:20 PM HST
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HONOLULU (HawaiiNewsNow) - The $3.4 billion budget passed by the Honolulu Council on Wednesday night included a $54 million tax break for owner-occupant property owners.

But the one-time $350 rebate may only be the beginning for tax relief.

The rebate could go to as many as 152,000 homeowners.

The residential property tax rate in Honolulu is $3.50 per $1,000 of a home’s value. So, the $350 rebate, actually a discount off the tax bill, is as if the home’s appraisal dropped by $100,000.

If the appraisal did not go up $100,000, a homeowner will actually owe less than last year.

Mayor Rick Blangiardi said the decision to offer the flat rebate for all properties regardless of value was intended to benefit owners of lower-value homes.

“A lot of those properties didn’t even go up a hundred thousand dollars,” Blangiardi said. “Or if they did it means you are paying a really nominal fee a little bit over that.”

Homeowners who have an owner-occupant exemption do not have to take any action, the rebate will be automatically subtracted from their tax bill.

The mayor and Council agreed the one-time rebate was the best way to respond to last year’s spike in home values and tax bills.

Council Chair Tommy Waters lauded the rebate when it passed at about 7 p.m. Wednesday.

“It’s a way we can put money back in people’s pockets this year,” Waters said.

“This occurs this year, so I am very happy.”

The controversy over the property value spike and potentially higher tax bills has generated new interest in broader tax relief, as rising home values force up taxes more and more.

City Budget and Finance Director Andrew Kawano said the administration is ready to look at many new proposals. “There’s a lot going on,” Kawano said. “There’s about 30 active tax bills that are still in discussion.”

Kawano said among them are higher taxes on vacant investment properties, lower taxes on long-term rentals, and reducing taxes for lower income homeowners and kupuna.

“We are going to increase the income limit for that to provide a greater safety net for homeowners who are lower income,” Kawano said. “We are also going to look at increasing the homeowners’ exemption.”

Council Budget Chair Radiant Cordero also mentioned the urgency to look at the larger tax system.

“This cannot be the end,” she said. “I really hope we can continue these real property tax discussions.”

But one thing Kawano said is unlikely to change is the reliance on sometimes roller-coaster property values to determine the tax bills.

In order to deal with the complexity and number of tax proposals the council decided to avoid Sunshine Law rules by setting up a special committee, called a Permitted Interaction Group, which can hold private meetings without public involvement. Anything the PIG recommends must go through the entire lawmaking process.