LIHU‘E — The Cost Control Commission will not to pursue a proposal to raise the minimum age to qualify for an age-related real property tax exemption, they decided Monday, as it would not have meant savings for the administration in
LIHU‘E — The Cost Control Commission will not to pursue a proposal to raise the minimum age to qualify for an age-related real property tax exemption, they decided Monday, as it would not have meant savings for the administration in processing time and the revenues may not have been significant.
Resident homeowners who are younger than 60 years old currently receive a $48,000 tax exemption. At 60 years old, the exemption increases to $96,000, and at 70 years old, it goes up to $120,000.
The commission was considering a recommendation to the Kaua‘i County Council to introduce a bill to eliminate one age bracket, potentially simplifying work for the administration and bringing in some additional revenue.
Chair Sandi Sterker’s original idea was to have one tax exemption increase to $120,000, kicking in at 65 years old, the higher relief offset by raising the age to qualify.
But the commission asked the administration to figure out the financial impacts if the $120,000 tax exemption kicked in at 60 years.
Finance Director Wally Rezentes Jr., whose last day was Friday, sent a communication to the commission indicating that, by simply lowering the qualifying age to 60, it would result in approximately $250,000 in lost revenue.
The administration’s calculation, according to Rezentes, is a “ballpark” estimate, due to the complexities of the Permanent Home Use tax cap and varying rates, as well as the different exemptions taxpayers can take.
If the commission had stuck to its original idea to pursue raising the qualifying age to 65 years old, delaying the age to first start receiving the age-related exemption may have been enough to offset the abrupt increase to $120,000 from $48,000 in exemptions, and even bring in a little more income to the county.
But Rezentes said in an earlier communication, dated Nov. 30, that calculating the impacts of raising the qualifying age to 65 were impossible to isolate, as the variables were too great.
Additionally, Rezentes said, reducing the number of age brackets would not save the county any money by means of less staff workload, as less age brackets do not mean less taxpayers.
“Whether the additional age exemption is broken in two or three categories is immaterial as the applicants’ birthdates must be entered by our staff. Thus, would be no cost savings or efficiencies achieved by reducing the tree age thresholds,” Rezentes wrote on the letter to the commission, dated Dec. 19.
The commission opted to receive Rezentes communication and to not pursue a recommendation to the council to change the county’s age-related tax exemption.
• Léo Azambuja, staff writer, can be reached at 245-3681 (ext. 252) or lazambuja@ thegardenisland.com.
