Hawaii Randy's Real Estate Opinions: Honolulu County Increases the Home Exemption for 2007

Honolulu County Increases the Home Exemption for 2007

DollarsIt is about time they give folks a break.  With the climbing of property values homeowners are paying as much a double and even more in some cases over what they paid 3 or 4 years ago.  Below is information posted from the City and County Website.

Real Property Assessment Exemption Information

Purpose

This document was prepared by the Real Property Assessment Division of the City Department of Budget and Fiscal Services to assist Oahu property owners seeking information on home exemptions. It explains how to qualify for exemptions which reduce the net taxable assessed value of the property used in determining the property tax. 

Background

The first home exemption law was enacted in 1896 by the Republic of Hawaii to provide some tax relief, encourage home ownership and the settlement of land. In 1896, the home exemption amount was $300. 

Beginning with the 2007 assessment (2007-2008 tax year) the basic home exemption for homeowners under 65 will be $80,000. This means that $80,000 is deducted from the assessed value of the property and the homeowner is taxed on the balance. For homeowners 65 years and older the home exemption will be $120,000. To qualify for this exemption, you must be 65 years or older on or before June 30 preceding the tax year for which the exemption is claimed.

Property owners with an existing home exemption, with their date of birth on file, do not need to re-apply for the new exemption amounts. The exemption amounts will automatically increase depending on the age of the homeowner.

Who Qualifies for the Home Exemptions?

You are entitled to the home exemption if: 

  1. You own and occupy the property as your principal home ("real property owned and occupied as the owner's principal home" means occupancy of a home in the city with the intent to reside in the city. Intent to reside in the city may be evidenced by, but not limited to, the following indicia: occupancy of a home in the city for more than 270 calendar days of a calendar year; registering to vote in the city; being stationed in the city under military orders of the United States; and filing of an income tax return as a resident of the State of Hawaii, with a reported address in the city; 
  2. Your ownership is recorded at the Bureau of Conveyances, State Department of Land and Natural Resources, in Honolulu on or before September 30 preceding the tax year for which you claim the exemption. In the case of a lease, the document must indicate that the lessee has a lease for residential purposes for a term of five years or more and will pay all property taxes;
  3. You file a claim for home exemption (Form P-3) with the Real Property Assessment Division on or before September 30 preceding the tax year for which you claim the exemption.

Single Home Exemption

The law allows just one (1) home exemption; if a husband and wife live apart and own separate homes, each shall be entitled to one-half (1/2) of one exemption or to an exemption apportioned between their respective homes in proportion to the assessed value.

In Lieu Of Home Exemption For Homeowners Age 75 Years And Older Whose Household Qualifies As Low-Income

Purpose: Exemption for real property owned and occupied as the owner's principal home whereby the owner is age 75 years or older and the total household income qualifies as low-income.

When To File: On or before September 30th preceding the tax year. For example, if you file for the exemption on or before September 30, 2005, it will apply to the tax year that begins July 1, 2006, and ends on June 30, 2007. The exemption for qualified applicants will appear on the Real Property Assessment Notice mailed to you on December 15, 2005, and will also be included in the tax calculation and tax bill mailed to you on July 20, 2006. You must re-file prior to the beginning of each 5 year age bracket.

What To File: • Form BFS-RP-P-4, Claim For Exemption; if you currently do not have a home exemption, you must also file Form BFS-RP-P-3 (Home Exemption). 

  • Copy of Federal or State income tax return; if none was filed, then complete Form BFS-RP-P-4A, Household Income Declaration.
  • Form BFS-RP-P-4B, Permission To Release Information 
  • Copy of Federal Form SSA-1099, Social Security Benefit Statement, which shows the total Social Security benefits paid to you last year.
  • The forms and instructions are available at the Real Property Assessment Division and on the Internet at www.honolulu.gov/rpa/form.htm. You can also request the forms by calling the telephone numbers listed below. 

Exemption Amount: The exemption amount is deducted from the property's value. To qualify for this exemption, you must be 75 years or older on or before June 30 preceding the tax year for which the exemption is claimed and the household income does not exceed the low-income limits established by the United States Department of Housing and Urban Development.

  • Age 75 to 79            $140,000
  • Age 80 to 84            $160,000
  • Age 85 to 90            $180,000
  • Age 90 and over      $200,000

Where To File:

  • Real Property Assessment Division
  • 842 Bethel Street, Basement
  • Honolulu, Hawaii 96813
  • Telephone: 527-5510 or 527-5539 Fax: 527-5540

Or

  • Real Property Assessment Division
  • 1000 Uluohia Street, #206
  • Kapolei, Hawaii 96707
  • Telephone: 692-5541 Fax: 692-5550

If you mail the forms and supporting documentation to the Real Property Assessment Division, it must be postmarked by the United States Postal Service no later than September 30.

For more details go the City and County website: http://www.co.honolulu.hi.us/rpa/forms.htm

 

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Randy L. Prothero, REALTOR®

Broker-in-Charge, ABR, AHWD, CRB, CRS, e-PRO, GRI, MRP, SFR

eXp Realty

Team Leader - "The Prothero Group"

Randy Prothero is well established as an expert in working with military / VA clients and first time home buyers.  His home seller's (listing) campaign is one of the most aggressive marketing programs in the area.  His luxury home listings sell faster and for more money.

Based out of Mililani, Hawaii. Randy services the island of Oahu (Honolulu County) Performs mediations and ombudsman services for the Board of Realtors.  To improve overall professionalism in his area Randy also offers classes for real estate agents. 

www.HawaiiRandy.comOahu (Honolulu County) Property Search  Hawaii Military Relocations

Comment balloon 9 commentsRandy Prothero • December 17 2006 05:39PM

Comments

Randy, I wish Connecticut would enact something like that, but their to busy trying to find more ways to tax the homeowners instead.  They even tried to pass a bill this year that would have imposed a .05% conveyance tax on buyers.
Posted by George Souto, Your Connecticut Mortgage Expert (George Souto NMLS #65149 FHA, CHFA, VA Mortgages) over 11 years ago

George - Our state incresaed the conveyance taxes.  They charge the seller at a higher rate if the buyer is not an owner occupant and if it is over a certain price.

Posted by Randy Prothero, Hawaii REALTOR, (808) 384-5645 (eXp Realty) over 11 years ago
Randy, it looks like they giveth with on hand and taketh with the other.
Posted by George Souto, Your Connecticut Mortgage Expert (George Souto NMLS #65149 FHA, CHFA, VA Mortgages) over 11 years ago
Randy, this is the most complete expose of the new Home Exemption schedule I've seen. It should be published!
Posted by Michael S. Mackey, REALTOR ABR, CRS, GRI, RSPS (CENTURY 21 All Islands) over 11 years ago

Randy, I agree with Michael.  It is too bad that so many people in Hawaii dont know about this exemption either because they dont read the paper or have the ability to do research on the internet (especially our senior population).  It is a great program but it would be nice if they made it automatic somehow.  I guess that would be a little bit of a challenge since some of the homes are not owner occupied which is what is required to get the exemption.

Posted by 1SG (Ret.) David Kucic, President and Owner (Hawaii Military Realty, Inc.) over 11 years ago

Randy, I agree with Michael.  It is too bad that so many people in Hawaii dont know about this exemption either because they dont read the paper or have the ability to do research on the internet (especially our senior population).  It is a great program but it would be nice if they made it automatic somehow.  I guess that would be a little bit of a challenge since some of the homes are not owner occupied which is what is required to get the exemption.

Posted by 1SG (Ret.) David Kucic, President and Owner (Hawaii Military Realty, Inc.) over 11 years ago

George - They mostly taketh.

Michael - It is published on my Blog.  J

David -  It is automatic.  I just got my assessment and it is on it.

Posted by Randy Prothero, Hawaii REALTOR, (808) 384-5645 (eXp Realty) over 11 years ago
I know it is automatic for them to do the increase but it is not automatic for homeowners to get the initial exemption.  I looked through the tax records in my neighborhood alone and saw that approximately 10% of the owner occupants were not claiming their home exemption.  Some of them have no idea they are entitled to it.  Last year, I made copies of the exemption form and took it around to all of the people that were not claiming their exemption.  I felt bad for them that they were paying higher property taxes than necessary.  Unfortunately I cant do that for the whole island :)
Posted by 1SG (Ret.) David Kucic, President and Owner (Hawaii Military Realty, Inc.) over 11 years ago

David and Tonya - Oh I thought you meant you had to apply to get the 2007 higher exemption. 

I have caught the home owners exemption for several of my neighbors and clients also.  A good way to make friends.

Posted by Randy Prothero, Hawaii REALTOR, (808) 384-5645 (eXp Realty) over 11 years ago

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