LIHU‘E — Delinquencies in real property taxes are on the rise, but not so much as to significantly affect the county’s financial health, said county Fianance Director Wallace Rezentes Jr. The county has, thus far, been “successful in our collection
LIHU‘E — Delinquencies in real property taxes are on the rise, but not so much as to significantly affect the county’s financial health, said county Fianance Director Wallace Rezentes Jr.
The county has, thus far, been “successful in our collection efforts,” Rezentes said in an e-mail last week. “We have seen the time to collect taxes protracted in the most recent year and months, but anticipate that the amounts owed will in large part remain collectable.”
Out of the some 33,000 parcels on island, about 31,000 taxable property owners paid their second installment fees by the Feb. 20 due date. While there were almost 2,000 new delinquencies last month and some 2,500 have been delinquent for more than one six-month period, the number of individuals past due only increased from 3 percent to 4 percent between 2008 and 2009.
The increase is “likely due to economic conditions,” he said.
Accounts not kept up-to-date could have a tax lien filed against the property after a year of delinquencies, Rezentes said.
“The director may sell by way of foreclosure — without suit — a property on which a lien for tax exists for three consecutive years,” he said.
In January, five properties which had been foreclosed upon were sold.
And even though property values have been declining, taxes increased by 0.18 percent for the current fiscal year (June 30, 2009 to June 30, 2010) and have remained relatively steady over the past few years, Rezentes said.
“The decrease in values in some classes of properties in 2009 was offset by an increase in the number of assessed parcels and by correctly resetting condo values between the land and building which should have been done in past years,” Rezentes said.
Sales that occurred between Jan. 1, 2009 to Dec. 31, 2009 will be used in the upcoming 2010 assessment that will take place in June.
The number of residential real estate sales slid around 8 percent from 2008 to 2009 and the value of properties fell about 23 percent, according to statistics from Multiple Listing Service.
The majority — 80 percent — of the county’s General Funds rely upon real property taxes, according to Deputy Director of Finance Belma Baris.
Because sales and home values are slipping, County Council Budget and Finance Committee Chair Daryl Kaneshiro said he anticipates a drop in budget revenue, but will not know for sure until figures are submitted on Monday.
What could be considered good news for property owners is that the county has never had to increase tax rates in order to compensate for delinquencies, Rezentes said.
“Tax rates are recommended by the administration and set by the county council,” he said.
So where does the money come from?
After a property has been foreclosed upon, the full amount of taxes can still be collected, Rezentes said.
“(O)therwise, we may write off from our accounts receivable those that are uncollectible for two years, as deemed by our finance director,” he said. “Council’s approval is needed for accounts over $1,000.”
