Property Tax Exemption Deadline Fast Approaching

 

Oahu property owners who do not have a homeowners exemption have only a couple of days to file and take advantage of a newly passed (and rare) tax break from the city.

 

Either way, it’s a good time to check to see whether you have the exemption, as it could save you lots of money.

 

If you applied previously and already have an exemption on your home, you are good to go and do not need to file again. Your exemption automatically will be increased to the new limits. Homeowners only need to file once for the exemption, which is eligible only on owner-occupied homes.

 

Monday is the deadline to file for an exemption for the next fiscal year. The exemption reduces property taxes by lowering the taxable property value. The values are set by the city every year.

 

The new law raises the standard home exemption to $100,000 from the current $80,000. For many homeowners, that would result in a very modest savings. The owner of an $880,000 house, for example, would save $70. And that’s only if tax-assessed values were to remain unchanged. If home values continue rising, that savings could be wiped out in a year or two.

 

Homeowners 65 and older receive higher exemptions.

 

This is the first time the city has raised the exemption in 13 years, when it went from $40,000 to the current $80,000. The new tax break is negligible but still welcome relief to homeowners who have seen their values and property taxes climb steadily over the past decade.

 

The last time the exemption was raised, in 2006, the median single-family Oahu home price was $630,000, compared with about $800,000 today.

 

The city’s property tax haul has surged with rising home values in addition to thousands of new houses and condos built across Oahu. Residential real property values on Oahu increased 5.4% to about $216 billion in the latest fiscal year.

 

The homeowner class alone accounted for $557 million in tax revenue, more than $100 million more than in 2015. But the revenue has been offset by the city’s soaring spending on everything from employee retirement contribution costs to the rail.

 

Honolulu Councilwoman Heidi Tsuneyoshi introduced the measure to increase exemptions, and it was unanimously approved by the full Council. However, Bill 3 was vetoed by Mayor Kirk Caldwell, who cautioned that it would result in the loss of more than $10 million in annual revenue.

 

In May the City Council voted 9-0 to override Caldwell’s veto.

 

To qualify for a home exemption, the property must be your principal residence not a second home or investment property. And you can have only one exemption. You also must have owned your home on or before Sept. 30, preceding the tax year for which you claim the exemption.

 

To file for an exemption, you’ll need to know your parcel ID (tax map key) number. This number can be found on your assessment notice or online on the city’s website.

 

Home exemptions can be filed at realpropertyhonolulu.com or in person at any satellite city hall or the Real Property Assessment Division offices downtown or in Kapolei.