KAILUA-KONA — The Hawaii County Council gave initial approval to a bill that would create a new tax category for luxury residences.
KAILUA-KONA — The Hawaii County Council gave initial approval to a bill that would create a new tax category for luxury residences.
The bill passed a first hearing before the council, West Hawaii Today reported Thursday.
The bill must undergo an additional council vote before being sent to Mayor Harry Kim, who has expressed support for the measure.
The proposed bill creates a new category but does not establish a rate. The council has until June 19 to set property tax rates.
Properties subject to the tax would include homes, vacant land and condominiums with a net assessed value of $2 million or more that do not have a homeowner’s exemption and classified as residential.
Under Kim’s proposed budget, property owners would pay a rate of $14.60 per thousand on all value over $2 million, compared to the current tax rate of $11.10 per thousand. The homeowner rate is $6.15.
The tax would apply to 935 of the island’s 140,000 properties, with 99% of the targeted properties located in three West Hawaii council districts.
Councilwoman Rebecca Villegas said she believes a higher rate for the wealthy is fair.
“Less than 1% are being asked to pay a little more,” Villegas said, noting what she called “the disparity of allocation of resources between the 99% and the 1%.”
Councilman Tim Richards was the lone vote against the proposal among the nine councilors.
“I’m for starting the economy but I don’t think taxing is the way to start the economy,” Richards said. “I think we’re going to have to work harder on our economy and harder on our budget and it’s going to be tough.”
