Kirk Caldwell, the mayor of Honolulu, has proposed a new tax increase for those who own luxury homes as well an increase in taxes on hotel and resort properties on Oahu. Under the plan, those homes that are considered to be "Residential Class A", which is defined as properties valued at $1 million and above and not receiving homeowner's exemption, would see tax rakes increase to $5.50 per $1,000 of valuation. This is a significant increase from the current $3.50 per $1,000. Hotel/resort properties would see their tax rate go up to $13.40 per $1,000 of assessed value, an increase from the $12.40 per $1,000 of value currently being charged. These two proposals would generate approximately $34.6 million per year in revenue for the city and would help close the $46 million revenue gap in next year's operating budget. Furthermore, Caldwell would like to institute a $10 monthly garbage pick up fee and allow for advertising on the sides of city buses. The garbage fee would raise another $20 million a year for the city and bus advertisement would raise another $1.5 million per year.
City Councilman Stanley Chang commented, "In Hawaii a $1 million home can be a very modest, old family property. I think it's deceptive to use a cutoff of $1 million." Ernie Martin, the City Council Chairman, added that he would anticipate that hotel and resort owners would request some type of relief if the new tax is imposed."
Source: Honolulu Star Advertiser, 3-1-2014, www.staradvertiser.com
Posted by Jeff Uyemura-Reyes, Principal Broker, REALTOR®
Global Executive Realty, LLC
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