Bill 36 introduced by budget chair Trevor Ozawa (District 4 – East Honolulu) heads to second reading before City Council on Wednesday, May 9. The bill would provide real property tax relief for property damaged or destroyed as a result of natural disaster – specifically the flood of April 13.
According to the bill, properties receiving a “destroyed” or “major” damage classification by the American Red Cross would receive relief on the total tax on the property for the 2017-2018 tax year. If the real property has been given a “minor,” “affected,” or “inaccessible” damage classification by the American Red Cross, the amount remitted will be 50 percent of the total tax on the property for the 2017-2018 tax year. But the amount remitted could not be less than the minimum tax of $300. The property owners would be required to complete an application with the City to determine eligibility. If approved, the City would issue a new tax bill for the real property showing the new real property tax owed, the amount due, and any excess payment or outstanding balance.
The City Department of Budget and Fiscal Services has testified that a major concern with the bill is that it provides a greater level of real property tax relief for the floods of April 13, 2018. They believe it is unfair to other property owners who have received real property tax relief under the city’s current natural disaster process and there is no limit on the level of tax relief. A door-to-door assessment by the American Red Cross reported that 3 homes were completely destroyed, 65 homes sustained major damage, and 146 homes suffered minor damage.
