The Department of Finance would like to inform all County of Kauai real property owners of the changes to the REAL PROPERTY LEGISLATION as outlined below. FOR DEADLINES - CHECK THE BACK PAGE OF YOUR 2024 ASSESSMENT NOTICE
TAX RELIEF PROGRAMS REQUIRING ANNUAL APPLICATIONS:
- Very Low-Income Tax Credit – owner-occupied properties with current Home Exemption and all titleholders who have a combined GROSS INCOME not exceeding 50% Kauai Median Household Income, may be eligible for property tax relief, limiting total real property taxes to 3% of the GROSS INCOME or Minimum Tax, whichever is higher.
- Additional Home Exemption for Low Income – owner-occupied properties with a current Home Exemption where the combined GROSS INCOME is at or below 80% of the Kaua‘i Median Household Income as determined annually by the department of Housing and Urban Development.
- Home Preservation Tax Limitation – owner-occupants whose home exemption has been in effect for a minimum of 10 years, does not own any other properties, with a property net taxable value of $750,000 or more, and gross income of ALL titleholders does not exceed $100,000 documented by Federal Internal Revenue Income Tax Return and State of Hawai‘i Income Tax Return, taxes are computed at 3% of total gross income.
- Long Term Affordable Rentals - residences rented for one-year or longer and at rent levels that do not exceed the affordable rental rates established by HUD and reported by the Kaua‘i Housing Agency based on 90% of the Kaua‘i Median Household Income. Exceptions to Annual Filing for those with qualified multi-year leases.
TAX RATES WILL BE DETERMINED BY COUNTY COUNCIL BEFORE JUNE 20th, 2024
- Bills will be published on July 20th, 2024
CHANGES TO REAL PROPERTY TAX OUTLINED BELOW:
- Ordinance 1150 – Repeals Residential Investor definition and previously preset valuation thresholds, renames three residential use tax classifications for better clarity, and establishes authority to annually set value thresholds and multiple tax rate tiers.
This ordinance removes the Residential Investor tax classification that had previously been applied to residential properties assessed at $1,300,000 or greater that were not being rented to long-term tenants or used as the owner’s principal residence.
Renamed the following tax classes for greater clarity and understanding:
Old Classification Name New Classification Name
Residential Non-Owner-Occupied Residential
Homestead Owner-Occupied
Commercialized Home Use Owner-Occupied Mixed-Use
Establishes authority to set up to three valuation thresholds with independent tax rates for incremental value differentials for all tax classifications. Determination of which tax classifications, the amounts of the valuation thresholds, and appropriate tax rates will be annually established during the budget process.
- Ordinance 1151- Increased Home Exemptions
This ordinance increases the amount of home use exemptions applied to owner-occupied properties by $60,000 for each of the following age thresholds:
Old Amount New Amount
Basic Exemption (owner-occupant less than 60 years old) $160,000 $220,000
Additional Exemption for Owner-Occupant aged 60-69 $180,000 $240,000
Additional Exemption for Owner-Occupant aged 70+ $200,000 $260,000
FILING DEADLINE IS SEPTEMBER 30, 2024
HOME EXEMPTION - If you are not currently receiving a home exemption, you may file a claim for the exemption to reduce the real property assessment on your home. To be eligible, you must occupy your property as your principal home for more than 270 days of a calendar year and file an income tax return as a full-time resident of the State of Hawaii with a reported address in the County the year prior to the effective date of the exemption. You must possess a valid Hawaii driver’s license, Hawaii State ID, green card, or military orders indicating assigned station in the County.
TOTALLY DISABLED VETERAN EXEMPTION -Real Property for which a home exemption under Section 5A-11.4 has been established by a Veteran who is 80% to totally disabled due to injuries received while on duty as a member of the armed forces of the United States shall be exempted from all property tax (with the exclusion of multi-unit properties) except the minimum tax of $150. Qualified Additional Income Exemption filings are eligible for the discounted minimum tax of $75. Veterans must file a claim on Form P-6 on or before September 30. The exemption will be valid as long as the veteran claiming the exemption remains totally disabled. Following the death of the disabled veteran, the surviving spouse, civil union partner, or reciprocal beneficiary may continue to receive this exemption for real property for which a home exemption has been established.
DISABILITY EXEMPTION - Any owner who is blind, deaf or totally disabled shall be exempt of up to $50,000 in addition to the homeowner's exemption. Any person who is a disabled Veteran and is less than 80% disabled due to injuries received while on duty as a member of the armed forces of the United States shall, so long as he or she is disabled, be exempt of up to $50,000. The disability shall be certified on forms prescribed by the Director of Finance.
KULEANA LAND – Shall pay the minimum real property tax as long as the real property is owned in whole or in part by a lineal descendant of the person(s) that received the original title to the kuleana land, and provided that the kuleana land shall be for primary ka hale use (owner- or family-occupied), agricultural use, or vacant. An application for this exemption shall be filed with the Director of Finance.
SAFE ROOM EXEMPTION - The owner of real property with a residential building(s), which meets the safe room definition, may apply to the Director pursuant to K.C.C. 1987, Sec. 5A-11.1 for a safe room exemption. No exemption shall be granted unless the owner has submitted to the Director an acceptable certification from an architect or structural engineer licensed. to practice in the State of Hawai‘i stating that the completed safe room meets the minimum FEMA and Building Code specifications for a safe room.
MIXED-USE COMMERCIAL-RESIDENTIAL EXEMPTION - If a parcel has a mixture of both residential and commercial use within the same building, it may be entitled to the following exemptions: (1) A one hundred thousand dollar ($100,000) exemption for each residential unit in a mixed-use building; and (2) A one hundred fifty thousand dollar ($150,000) exemption for each residential unit in a mixed-use building that meets the lease and rent requirements of a long-term affordable rental pursuant to Section 5A-11A.1(a). For all qualifying residential units, the exemptions apply to the total assessed value with a maximum reduction to the assessment of 25% for residential units or 35% if more than 50% of the units meet the lease and rent requirements of a long-term affordable rental. The underlying tax class is to remain Commercial. The maximum reduction amount is based on the difference between the Non-Owner-Occupied Residential tax rate or the Owner-Occupied Mixed-Use tax rate. See Kauai County Code Sec. 5A-11.32 for further details.
HOME PRESERVATION TAX LIMITATION - owner-occupants whose home exemption has been in effect for a minimum of 10 years, does not own any other properties, with a property net taxable value of $1,000,000 or more, and gross income of ALL titleholders does not exceed $200,000 documented by Federal Internal Revenue Income Tax Return and State of Hawai‘i Income Tax Return, taxes are computed at 3% of total gross income.
FILING DEADLINE IS July 1, 2024
AGRICULTURAL DEDICATION PROGRAM – Petition to Dedicate Lands to Agricultural Use for Commercial Farming (Product-to-Market) for a period of 5 years.
“Agricultural use” means the active use of the land to produce agricultural products with the primary purpose of obtaining a monetary profit from income received from the sales of agricultural products. Agricultural use excludes selling, refining, or distributing agricultural products when the vegetation from which such products are derived was not grown on the parcel and when the animals from which such products derived were not raised on the parcel. Agricultural use includes meat packing or processing operations occurring on the same parcel the animals were raised on, provided that the packing or processing structure will be taxed based on its fair market value.
“Agricultural products” means products derived from animals or vegetation, including: the cultivation of floriculture, horticulture, viticulture, and aquaculture products; forestry products; tree farm products; nut products; coffee products; dairy products; poultry products; bee products; livestock or animals raised by grazing and pasturing (except horses); and any other farm, agronomic, or plantation products, excluding products (e.g., hay) derived from guinea grass, leucaena (koa haole), panicum, pangola, kikuyu, napier grass, and similar forage crops.
HISTORIC RESIDENTIAL REAL PROPERTY DEDICATED FOR PRESERVATION EXEMPTION – Application for a 10-year dedication on properties included in the Hawaii Register of Historic Places.