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Sunday, January 11, 2015

Controversy Still Surrounds New Residential "A" Tax Classification

In 2013, the City and County of Honolulu created the Residential "A" Tax Classification, which significantly increased the property taxes for all Oahu residential properties valued at $1 million or more, where the owner does not have a homeowner's exemption.  Residential A owners now pay $6 per every $1,000 of assessed value while those with homeowner exemptions pay just $3.50 per $1,000 of assessed value. There are approximately 8,557 properties on Oahu that have been designated as Residential A.

Opponents of the tax law argue that it is not ethical, rational, fair or legal to create tax classes based upon assessed value, when they are all built for residential use.  Previously, property tax classes were based on use, for example residential, hotel/resort, agricultural, or business.  As property values increase, there will be more and more homeowners who may be pushed into Residential A class. There is now discussion about challenging this law in court.

Source: Honolulu Star Advertiser, 1-11-2015,
Posted by Jeff Uyemura-Reyes, Principal Broker, REALTOR®
Global Executive Realty, LLC