Property owners: Upcoming real property changes

The Garden Island

LIHU‘E — County officials are reminding property owners about the changes to the county’s real property system that will take effect on July 1.

Ordinance No. 920, the law mandating the changes, was passed in December of last year to provide for a fair, more efficient real property tax system.

One of the most significant changes pertains to properties that are owner-occupied and also have long-term affordable rentals (LTLs).

Under the new law, owners of this type of dual usage properties are now eligible for the homestead tax rate as well as the Permanent Home Use (PHU) tax cap.

To qualify, LTLs must be leased for one year or longer at levels that don’t exceed 80 percent of the Kaua’i median household income, which are established annually by the U.S. Department of Housing and Urban Development.

Applications for the new tax rate for dual usage properties must be submitted by Sept. 30.

The following summarizes other major changes to the county’s real property tax system:

• Assessments will no longer be shown as separate land and building values, but rather as a single property value.

• The date of valuation will be moved from Jan. 1 to Oct. 1.

• The filing deadline for all exemptions is Sept. 30.

• All property dedications must be filed by July 1.

• The additional exemption for low income was increased from $55,000 to $120,000.

To qualify for this exemption for tax year 2013, applicants must have a household gross income of $60,200 or less based on 2011 tax returns.

• The permanent home use cap was changed from a flat rate of two percent to the annual percentage change in the consumer price index-urban (CPI-U) for Honolulu.

• Tax classification will be based on the actual use of the property.

• The apartment tax class was eliminated and a vacation rental class was added.

• The disputed valuation threshold for appeals will be lowered from 20 percent to 15 percent. Appeal processing feels will be increased from $10 to $25 for owner-occupied properties and those filing appeals for all other properties will be charged a $75 fee.

For more information about the real property tax changes, call the county’s real property assessment office at 241-4224.

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