Council Information Briefing Scheduled

Wednesday, August 24, 2022 at 9:00 a.m.

In person and via livestream and television

8/20/22:  Annual property taxes on both historic homes and historic commercial properties on the island of O‘ahu would face substantial increases if Honolulu City Council follows the recommendation of the O‘ahu Real Property Tax Advisory Commission.

The recommendations of the Commission will be reviewed by City Council’s Committee on Budget on Wednesday, August 24, 2022 at 9:00 a.m. in the City Council Chamber. The meeting will also be livestreamed and televised.

The Informational Briefing (Agenda Item 17) provides the Commission’s 2021-2022 final report and recommendations on credits and exemptions currently provided by the Revised Ordinances of Honolulu.

The Commission’s Report states:

Historic Properties Exemptions under ROH Sections 8-10.22 and 8-10.30

The Commission recognizes that there have been significant improvements in the administration of the historical properties program as specifically addressed in the City Auditor’s Report Nos. 13-023 and 19-074 . The Commission reiterates the recommendation made by the 2019 Commission that the exemptions provided to historic residential and commercial real properties be amended to increase the minimum real property tax from $300 to $1,000. Should the City Council concur with the recommendation to revise and increase the minimum RPT imposed on these properties, this Commission also suggests the City Council consider a means-based qualification, as well as whether the historical properties program itself continues to serve a necessary and beneficial purpose to the City and its taxpayers, i.e. repeal.

The City & County of Honolulu uses exemptions and reductions of property taxes as means to support and promote public benefits. The Revised Ordinances of Honolulu identifies 27 categories of exemption, affecting 156,588 parcels and representing a total exempted valuation of $33,583,998,000.

Of this, the highest quantity of exemptions (in both count and value) comes from the home exemption (148,839 at $17,866,392,000). The exemptions for historic residential properties include 376 homes while the historic commercial property exemption applies to 14 buildings. Together, the exempted value for historic buildings dedicated for preservation is about 2% of the value of all property tax exemptions.

Under the current tax incentive program for preserving historic homes, property owners may receive a tax exemption for the portion of the property dedicated for historic preservation, subject to conditions that include the property being listed on the Hawai‘i Register of Historic Places, retaining the historic character, providing visual access from the public way and installing a plaque about the historic significance (ROH Sec 8-10.22).

The exemption for historic commercial buildings is for 50% of the assessed value of the historic property and requires the property being listed on the Hawai‘i Register of Historic Places, retaining the historic character and an adopted 10-year maintenance plan.

While the total foregone tax revenue is immaterial in the scope and scale of the City’s budget, it makes a significant difference in helping to preserve and retain Hawai‘i’s historic properties by providing financial support for appropriate treatment and maintenance.

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