According to the 2020 report by the County Real Property Tax Board of Review, more than twice as many property owners appealed their tax assessments this year as they did last year.
The five-member volunteer panel, which spends long hours evaluating owners’ appeals to their assessments, reported 750 appeals against properties totaling $ 660.7 million, compared with 355 appeals in 2019.
Of the most recent complaints, 407 were on land in Eastern Hawaii and 343 were on parcels in Western Hawaii.
Of the cases brought before the Chamber, one was dismissed, 170 cases resulted in a lowering of the rating or approval of an exemption by the Chamber, 105 of the county’s ratings were upheld by the Chamber, 340 resulted in an agreement between the county and Complainant and 134 were withdrawn from Complainant, Deputy Real Estate Tax Administrator Keita Jo said.
Jo said the increased number of cases was not a surprise.
“This was expected from February due to the impact of COVID-19 and many were able to re-examine their assessments,” she said. “However, the review date for last year’s review was January 1, ahead of the potential impact of COVID-19 on the property market.”
Next year’s assessments could generate a similar barrage of objections if the announcements are made March 15, she said.
“We expect a large number of objections for the 2021 assessments as the current COVID-19 crisis continues,” said Jo. “It should be noted, however, that preliminary market data supports an increase in many sectors of the Hawaii County real estate market for the upcoming March 15th valuations.”
She said the division will continue to monitor sales over the coming weeks and months and adjust accordingly.
The board recommended that the county make the $ 50 appeal fee non-refundable. Currently, the fee is being refunded to taxpayers who win their appeal. The change would require action by the county council.
The Board also recommended for the eighth consecutive year that the county abolish a tax exemption program known as the “non-speculative housing program.” This is advocated by both the Tax Board and the Real Property Tax Review Working Group.
A 2008 law closed the program to new homeowners, but those who entered the 1958 program could have an unfair advantage over other property owners who cannot participate, tax officials said. The program allows owners to freeze their property value for five or ten years by dedicating it to their own use on the homestead. The real estate class of homeowners in the district and an exemption for homeowners have replaced the program for all but 483 property owners.
One of the recommended steps is to notify all owners who currently have packages in this program of the 2019 tax year suspension, to enable all packages currently in this program to automatically enter those packages into the 2019 Homeowner Exemption Program at the Frozen Value Program and then to explain the upper limit of 3 percent to be applied to the 2020 tax year.
The 2020 tax year real estate tax revenue impact based on the current frozen out of specification values would total $ 23,000. Additionally, the county will save approximately $ 4,400 annually in staff time managing the program.
“The board believes that the non-speculative housing program should no longer exist as the homeowner class, exemptions, and other programs have taken their place,” the report read by the five members, Chairman Michael Hughes and signed by Vice-Chair Emygrace (Grace) Reinhard, and members Nelson Harano, V. Diane Blancett-Maddock and Michael Okumoto.