HONOLULU (KHON2) — Mayor Michael Victorino announced his disapproval of Bill 59, relating to Real Property Tax Valuations, citing concerns over the potential negative consequences of the proposed tax classifications and a lack of understanding by taxpayers.
“With all of the unknowns related to the proposed tiered rates structures, the new consolidation of classifications, and the new titles of the classifications, I feel that these changes are creating confusion for real property taxpayers,” Mayor Victorino said. “I do not feel enough information has been provided to the taxpayers of Maui County to have a complete understanding of the potential impacts of this bill.”
Mayor Victorino objected to the Council’s new proposed real property tax classifications of combining “properties with dwellings” in the current Agricultural, Conservation, Apartment, and Residential classifications into a new classification entitled “non-owner occupied.” Combining the classifications raised concerns due to the four classifications having different tax rates – and for Fiscal Year 2021 – there can only be a single rate for the newly combined classification.
“This consolidation would have impacts based on the adopted real property tax rate,” Mayor Victorino said.
The largest group in the new “non-owner occupied” classification is the current residential classification. The classification contains a majority of the long-term rentals and has the lowest tax rate amongst the four classifications being combined to form “non-owner occupied.”
“In order for the rate to be revenue neutral, our calculations (based on the Fiscal Year 2020 certified values and rates) show that we would need a rate of $5.92 per $1,000 of assessed value,” Mayor Victorino said.
The current rates of the four classifications are:
- Residential – $5.60
- Agricultural – $5.94
- Apartment – $6.31
- Conservation $6.43
“While I realize the tax burden could be shifted within the non-owner occupied classification through the implementation of the proposed tiered rates structure, I would like our taxpayers to have more time to review how these potential changes will affect them,” Mayor Victorino said.