Property owners may want to make a New Year’s resolution to save money, because they’ll need it to pay for rising property taxes.
The tax rate still has to be decided, but assessed values are up all across Oahu by an average of seven percent.
Property taxes are not just tied to our assessment, it is also tied to the tax rate. Tax rates will not be decided until next spring.
You can trace that hike in property tax assessments to the fact that homes on the island are selling like hotcakes — so hot that, in November, 56 single-family homes from Diamond Head to Mililani to Makakilo, sold for at least a million dollars.
November also set the record for the highest median price for a single-family home on Oahu, $719,500.
Realtors say there just aren’t enough homes to buy, so sellers can command the high prices. “It’s very tight, and with the supply-and-demand principle, you won’t be able to control it,” said Jack Legal, the president of the Honolulu Board of Realtors.
“It’s sticker shock, in a way,” said Ernie Martin, chairman of the Honolulu City Council. “It’s always nice to have a new car, until you have to pay for it.”
“So I’m sure there will be a lot of appeals this year,” said Ann Kobayashi, the chairwoman of the council’s budget committee.
No one on the island escaped the hike in residential property assessments. The largest increase occurred in Leeward Oahu with a 11 percent jump, followed by the North Shore at 8.6, and Urban Honolulu at 8.3.
The other zones also saw an increase in property values, with Windward Oahu being the least at 3.9 percent.
What residents are bracing for is the other shoe to drop, because the actual meaning of the increased home value depends on the City Council.
KHON2 asked key Council members if they will also hike property tax rates, now set at $3.50 per $1,000 in assessed value.
“We don’t plan on raising taxes,” Kobayahsi said. “Everyone’s having a hard time.”
KHON2 also asked Martin if there was any chance that there will be property tax relief. “You know, I would take a look at it,” he said. “I cannot commit for the rest of the members.”
The Council will take another look at that new controversial tax classification “A” that imposes higher taxes on second homes and investment properties valued at a million dollars or more — homes that may also be rentals.
“And if assessments goes so high that even the smaller homes are now worth a million dollars? We’re going to have to look at should we raise that threshold to protect renters,” said Kobayashi.
A property owner’s assessment notice from the city’s Department of Budget and Fiscal Services – Real Property Assessment Division will be for the tax year July 1, 2015 to June 20, 2016. The notice will also tell you if you qualify for an exemption, and also states the period when you are able to appeal your assessment to the city.
The deadline for appeals is January 15. For more information, visit www.realpropertyhonolulu.com.