Special council meeting to hear bill to create luxury home class

  • Aaron Chung

A new tax classification for properties assessed at more than $2 million will be the subject of a special County Council meeting this week — and for the first time since the COVID-19 restrictions began, the public will be able to testify in person.

The meeting will be held at 2 p.m. Wednesday, with council members present in Kona and Hilo council chambers. Members of the public who wish to testify will be directed to a nearby conference room, where they will be able to testify via videoconference. The council chambers will remain closed to the public.

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Public participation has been limited to written testimony since the beginning of the COVID-19 outbreak in March. Testifiers have used that route to get their opinions known, with 30 such pieces of testimony sent in for last Wednesday’s council meeting.

The loosening of public testimony restrictions follows a proclamation Tuesday by Gov. David Ige, followed by new rules Wednesday by Hawaii County Mayor Harry Kim.

“Keeping in the spirit of opening things up, we’re going to work on getting more public participation,” Council Chairman Aaron Chung said. “It’s going to be something that’s very fluid.”

The creation of a special tax class for luxury homes has been discussed by council leaders and Kim as a way to help bring more money into a coronavirus-stressed budget. Bill 169, sponsored by Chung and council Finance Committee Chairwoman Maile David, will start the wheels in motion by creating the tax classification, known as a tiered rate structure.

The bill defines “residential tier two property,” subject to the tax to include homes, vacant land and condos with a net assessed value of $2 million or more that don’t have a homeowner’s exemption and are “classified as residential in consideration of the highest and best use of the land.”

The bill does not set the tax rate; it just creates the new category. The council has until June 19 to set property tax rates.

Kim’s proposed budget includes no property tax hikes except for the additional tax on residential property — generally second or third homes — valued at $2 million or more. Those property owners would pay a rate of $14.60 per thousand in value on all value over $2 million, compared to the current tax rate of $11.10 per thousand. The homeowner rate is $6.15.

The new tax on $2 million residential property is expected to raise $14 million. But it’s not likely to be popular with some owners, their representatives and real estate agents, especially in West Hawaii, where the majority of such residences are located.

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County Clerk Jon Henricks said testifiers will be required to wear masks and use hand sanitizer before they enter the conference room one at a time.

“We encourage people to come and participate (this way),” Henricks said, “until we can be in a position to open up the doors again.”

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