Non-residents property tax increase

This is the current Bill passed by the City Council in 2014-2015 on non-resident property tax

1. Residential A Tax Rate (2014-2015):

• $6.00 per $1,000 of assessed value for properties classified under Residential A.

Comparison to Owner-Occupied Properties:

• Residential Tax Rate (2014-2015):

• $3.50 per $1,000 of assessed value for owner-occupied properties.

The higher tax rate for Residential A properties was aimed at non-owner-occupied properties valued over $1 million, reflecting the city’s efforts to manage the impact of non-resident property ownership on the local housing market.

Residential A Classification:

1. Definition:

• Properties that are not owner-occupied and have an assessed value of $1 million or more. This includes investment properties, second homes, and other high-value residential properties owned by non-residents.

• These properties do not qualify for the homeowner's exemption.

1. Tax Rate:

• The Residential A classification was introduced to impose higher tax rates on non-owner-occupied properties to address housing affordability issues and generate additional revenue. For the fiscal year 2014-2015, the initial Residential A tax rate was $6.00 per $1,000 of assessed value.

Revenue Generation:

• The implementation of the Residential A classification significantly increased property tax revenue. According to data from the Honolulu City and County budget, property tax collections rose from $834 million in fiscal 2014 to over $1.5 billion in fiscal 2023​. It has been 10 years since that bill. And we want to continue to move forward with principles that will help the people of Hawaii.

I would like to raise it again to $7.00 and it can have two major impacts.

1. Increased revenue for the city

2. Some investors will sell, thus creating a new, market for Real Estate Brokers.

The overall effect on the real estate market should be studied and considered with new bill.