{"id":120,"date":"2026-05-17T10:35:17","date_gmt":"2026-05-17T10:35:17","guid":{"rendered":"https:\/\/movingtohawaiiguide.com\/?p=120"},"modified":"2026-05-17T10:35:17","modified_gmt":"2026-05-17T10:35:17","slug":"property-tax-hikes-eyed-county-faces-15-million-budget-deficit","status":"publish","type":"post","link":"https:\/\/movingtohawaiiguide.com\/?p=120","title":{"rendered":"Property tax hikes eyed: County faces $15 million budget deficit"},"content":{"rendered":"
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The Hawaii County Council will hold a public hearing Tuesday to consider raising property tax rates for nonresidents and those with second homes in an effort to close the gap on an estimated $15 million budget shortfall.<\/p>\n

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The Hawaii County Council will hold a public hearing Tuesday to consider raising property tax rates for nonresidents and those with second homes in an effort to close the gap on an estimated $15 million budget shortfall.<\/p>\n

Proposed rate hikes for the next fiscal year would predominantly affect non-owner-occupied homes, with the largest increase levied on properties worth $2 million and above \u2014 known as the \u201ctier two\u201d residential tax rate. This rate would rise from $13.60 to $15.00 per $1,000 of taxable value.<\/p>\n

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The \u201ctier one\u201d residential tax rate, which applies to properties worth less than $2 million, would increase from $11.10 to $12.10 per $1,000 of taxable value.<\/p>\n

Additionally, the upcoming fiscal year will be the first to see a new \u201ctier three\u201d residential tax rate implemented, which applies to high-value second homes and investment properties worth more than $4 million.<\/p>\n

This \u201cluxury\u201d rate was established with the council\u2019s passage of Bill 128 on March 4 with a 5-1 vote in favor. It\u2019s proposed to be set at $17.00 per $1,000 of taxable value. Revenue generated from this novel tier will be directed toward local affordable housing and homelessness programs.<\/p>\n

At the same time, many residents will see a slight reduction in their property taxes. Under the new proposed rates, the vast majority of owner-occupied homes and affordable rental housing will receive a $0.20 (or just over 3%) reduction in tax rates, falling from $5.95 to $5.75 per $1,000 of taxable value. This is a deliberate carve-out for Hawaii Island locals, whom county officials have conceded are caught in the midst of a spiraling cost of living and housing affordability crisis.<\/p>\n

\u201cThat\u2019s our people,\u201d council Chair Holeka Inaba told the Tribune-Herald. \u201cThey are residents of our county, and that\u2019s their primary residence, so (we are) making sure that we are trying to take care of our local working-class families who actually own property and trying to offset inflation (and) cost of living. We know that our ohana on this island are struggling, so with these proposed rates there might not be a reduction in the actual tax bill, but it counters a potential increase to the tax bill.\u201d<\/p>\n

This slight reduction in the tax rate for these properties might not translate into a lower tax bill, as Inaba suggested, because under the county\u2019s \u201chomeowner exemption\u201d the value of owner-occupied homes can increase by a maximum of 3% per year \u2014 called an \u201cassessment cap.\u201d<\/p>\n

Paired with this roughly 3% decrease in their tax rate will mean many resident taxpayers will end up breaking even. According to the county\u2019s Real Property Tax Division, nearly 39,000 owner-occupied homes on the island are granted this exemption, making up approximately 27% of all parcels and representing the vast majority of \u201cprimary residential owner-occupants.\u201d<\/p>\n

This targeted approach to taxation has enjoyed the support of Mayor Kimo Alameda, who ran his 2024 campaign on a platform of affordable housing, among other issues.<\/p>\n

\u201cI definitely don\u2019t think we should put those tax increases on the everyday resident, right?\u201d Alameda said. \u201cI think the County Council is looking at placing that burden on nonresident owners, particularly those with higher value properties.\u201d<\/p>\n

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Alameda said the county is \u201clooking at an approximately $15 million shortfall that doesn\u2019t look like it\u2019s going to get better\u201d in the coming year.<\/p>\n

\u201cWastewater, operational costs, the increase in our contract negotiations with the unions, basic inflation \u2014 I mean, you name it, it\u2019s coming from all kinds of angles,\u201d he said when asked what\u2019s behind the shortfall.<\/p>\n

Making nonresidents foot more of this bill, he said, is an equitable option to ensure that ends meet.<\/p>\n

\u201cFinding new revenue streams to balance the budget next year is going to be critical,\u201d he said. \u201cAnd, you know, targeting the nonresident owner, I mean, it could definitely raise revenue, shift some of the tax burden toward owners who do not live here, but they still rely on our services, right? They use our roads, our emergency response. I think it\u2019s fair.\u201d<\/p>\n

The mayor added that policies like this can help reduce the number of unoccupied luxury homes on the island by making their ownership costlier.<\/p>\n

\u201cI think by doing that you accomplish not just a revenue stream that doesn\u2019t put the burden on the local resident,\u201d he said, \u201cbut you incentivize these huge homes that are vacant most of the year. It\u2019s kind of what my platform was when I ran for the mayorship \u2014 that\u2019s what I was hoping: We take care of the locals.\u201d<\/p>\n

Tax rates for other property types like Hotel and Resort, Commercial, Industrial and Agricultural are slated to remain the same, which the mayor explained is a way to avoid price increases.<\/p>\n

\u201cI know we don\u2019t want to increase the rates for businesses, because then they pass that on to the consumer,\u201d Alameda said.<\/p>\n

When asked why the Homeowner and Affordable Rental Housing property classes would see a tax reduction while the rates for other types remained the same, Inaba said it boils down to a property\u2019s income generating potential.<\/p>\n

\u201cWhile other properties don\u2019t have an assessment cap, some of those like Industrial, Commercial, Hotel and Resort, they are also money-making properties,\u201d he said. \u201cYou\u2019re allowed to do commercial activities on those types of properties. Whereas in these that we are reducing, it specifically doesn\u2019t allow for any type of commercial activity with the exception of agriculture.\u201d<\/p>\n

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Email Stefan Verbano at stefan.verbano@hawaiitribune-herald.com.\n<\/p>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

Property tax hikes eyed: County faces $15 million budget deficit – Hawaii News | Hawaii Tribune-Herald<\/p>\n","protected":false},"author":1,"featured_media":119,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[],"class_list":["post-120","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news"],"yoast_head":"\nProperty tax hikes eyed: County faces $15 million budget deficit - Moving to Hawaii Guide<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/movingtohawaiiguide.com\/?p=120\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Property tax hikes eyed: County faces $15 million budget deficit - Moving to Hawaii Guide\" \/>\n<meta property=\"og:description\" content=\"Property tax hikes eyed: County faces $15 million budget deficit - 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