Appeals of property values at all-time low

  • MAYOR HARRY KIM

HILO — Big Island property owners aren’t fighting their tax assessments as hard as they used to.

The Real Property Tax Review Board heard just 195 appeals last year, compared to 399 in 2016. The count hovered at about a thousand before that, with an all-time high of 1,516 cases in 2008. There are some 140,000 parcels in the county.

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“This is the lowest we’ve seen,” said Assistant Real Property Tax Administrator Lisa Miura. “Appeals are very low for everybody.”

Some $326.5 million in property values were disputed last year, with most cases, as is typical, coming from West Hawaii, where property values are higher. Of the cases, 119 were from West Hawaii and 76 from East Hawaii, according to the board’s annual report to the mayor and County Council.

Miura said this coming year may show whether the low complaint rate is a fluke or a trend, as property values continue to rise, and a tax rate hike instituted last year continues.

One area of increasing concern is the use of residential property for short-term rentals, such as through online companies such as Airbnb and VRBO. Some neighbors worry that the vacation rentals are ruining the ambiance of neighborhoods, while others say it’s a way for families to afford to own a home.

Mayor Harry Kim said the administration, which previously was working on a bill, has turned the project over to the County Council. Two council members are working on legislation that is expected to be introduced this month, he said.

“In the meantime, we as a county are working with the state Legislature to make sure there’s good coordination on this issue,” Kim said.

The County Council Finance Committee, which meets in Hilo at 10:45 a.m. today, is scheduled to take up a report from the Real Property Tax Review Working Group. The group’s 24-page quarterly status report covers progress made on agricultural exemptions, tax categories and Finance Department staffing, among other issues.

The group was created last year with these goals: Increase fairness of the county’s real property tax program, identify and incorporate best property tax administrative practices, propose additional tax programs as appropriate and identify public policy goals and incorporate them into the county’s real property tax program.

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Both the working group and the tax board say the county should do away with a tax exemption program known as the “non-speculative residential” program. A 2008 law closed the program to new property owners, but those who were grandfathered into the 1958 program may have an unfair advantage over other property owners who can’t participate, Miura said.

The program allows property owners to freeze their property value for five or 10 years by dedicating it to their own homestead use. The county’s homeowners property class and a homeowners exemption have taken the place of the program for all but 483 property owners.

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