Adjust the burden of property taxes

In past years the largest increases in property tax, the city’s primary revenue source, have been directed to nonresidential categories. Calvin Say, who chairs the Council Budget Committee, said the city already has increased the tax on resort district properties, as well as on nonresident homeowners.

But that wouldn’t make tapping owner-occupied residential property any more palatable now, he said.

There are models Honolulu should consider, including one from neighboring Maui County, said Will White, director of the Hawaiʻi Budget & Policy Center, a program of the nonprofit Hawaiʻi Appleseed Center for Law & Economic Justice.

Maui has just remade its property-tax system so that the top tier, for a nonowner-occupied home valued at more than $4.5 million, is set at $12.50 per $1,000 of net taxable assessed value.

That’s significantly higher than the current top rate for the investor class on Oʻahu: $10.50 per $1,000 of assessed value for residential properties over $1 million. There’s room to move up. There should be tiers for higher property values, for starters, given the huge increases in valuations.

Additionally, Bill 9, introduced last year by Council Chair Tommy Waters, should get another look where it’s now idling in the Budget Committee. It would create a new “empty home” tax for investor homes that are vacant for six months of a year.