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Hawaii County committee backs exempting buildings on Hawaiian homelands from property tax
Summary
The County Council finance committee voted to forward Bill 44 to the full council with a favorable recommendation. The bill would exempt buildings on Department of Hawaiian Home Lands parcels from real property tax while retaining a minimum tax; county staff estimate about $1.44 million in annual revenue loss.
The Hawaii County Council Committee on Finance voted to forward Bill 44 to the full council with a favorable recommendation after discussion among council members and county tax officials.
Bill 44 would amend Chapter 19, Article 10, Section 19-89 of the Hawaii County Code to exempt the value of buildings on Hawaiian Home Lands homestead parcels from real property taxes, while preserving a minimum tax. Councilmember Reynaldo Inaba, who introduced the measure with Councilmember Brandon Eustace, said the change replaces the code phrase “exclusive of buildings” with “inclusive of buildings” to align county practice with other islands and reduce disparities for homestead lessees.
Real Property Tax Administrator Lisa Miura told the committee the office reviewed the proposal and found it would “make it more fair and in line with the other counties.” Miura noted an administrative requirement: parcels remain under state Department of Hawaiian Home Lands (DHHL) control until a state “route slip” transfers them to the county tax roll. Keita Joe, Assistant Real Property Tax Administrator, added the change would increase equity because some lessees currently receive homeowner exemptions and others do not; under the proposed language more lessees would receive the same benefit.
Council members said they supported the measure for parity with other counties. Councilmember James Kimball asked for counts; staff said about 29% of parcels already in the homeowner classification are at the minimum tax and estimated the change would increase the number of parcels at minimum tax to roughly 2,098. Staff estimated an annual reduction in county property tax revenue of approximately $1,440,000 if the bill passes.
The committee discussed budget implications but members generally described the expected revenue reduction as manageable and supported the change on equity grounds. County staff said the bill would reduce workload in the tax office because homeowners on affected parcels would no longer need to apply for exemptions one-by-one.
The committee’s motion to forward Bill 44 to council carried with the clerk reporting nine members in favor.
The committee also noted that outstanding delinquencies on commercial DHHL leases remain a separate issue to be pursued with the department.
