Oahu real property values this year soared 6.8 percent to their highest on record — $275.46 billion — the city said Tuesday.
The value of city real property assessments has been going up steadily since the last dip in 2009 and 2010. The city says the value of residential real property increased 5.4 percent to $215.71 billion for the latest tax year, which runs from July 1 to June 30, 2019. The value of hotel and resort property was up 13.3 percent, the commercial class increased by 10.7 percent and industrial property values jumped 15.1 percent.
According to city assessors, North Shore home values rose 10.1 percent, the most of any region. Other big residential gainers were Leeward Oahu, which rose 7.5 percent; Kaaawa to Kahuku, which grew 7.4 percent; and Central Oahu, which increased 6.8 percent.
John Riggins, owner of John Riggins Real Estate, said, “Areas that are getting the greatest amount of appreciation are typically the areas that lag behind East Oahu. As prices have gone up, demand has spread to more affordable outlying areas like Central and Leeward Oahu. The North Shore’s growing popularity among surfers and vacation renters could have contributed to the increases there.”
Steven H. Takara, administrator of the city’s Real Property Assessment Division, said the values were determined by about 40 assessors, who reviewed sales to determine the market value of Oahu’s properties on Oct. 1.
“We consider ourselves fair. We have uniformity and equity,” Takara said. “We don’t discriminate as far as properties or owners.”
Newer residential subdivisions, recently built condominiums and the robust commercial, industrial and hotel and resort classifications contributed to this year’s increases, he said.
Jaymes Song, an agent at Better Homes and Gardens Real Estate Advantage Realty in Kahala, said the city’s residential real estate valuations are in the ballpark of what he’s been seeing in the market. However, Song said the market began slowing down in the third quarter and softened in the fourth quarter. The increases also are coming at a time when some buyers have been strained by the sharp, quick rise of interest rates, he said.
“It’s hard to predict where prices are going to be next year. The city has a complex assessment, and a lot of people may not agree with it. I recommend (appealing) if they think their assessment was unfair,” he said.
Last year some 1,413 real property appeals were logged with the city. Appeals are still pending.
The city sent out 295,000 notices Saturday via email or the U.S. Postal Service.
Your property tax bill is determined by the value of your property times the tax rate set by the city. Exemptions can bring the taxable property value down. The current tax rate for owner-occupied homes is $3.50 per $1,000 in value.
For example, the owner of an $880,000 home who is under 65 years old would get an $80,000 exemption. With a net taxable value of $800,000 and a tax rate of $3.50 per $1,000 in value, that homeowner would pay about $2,800.
The Honolulu City Council typically decides the tax rates in June.
“City Council can increase or decrease rates based on financial needs,” Takara said, adding that new tax bills will be mailed in July.
The city estimated it will raise nearly $1.27 billion from 2018’s real property tax bills.
Property owners can use their tax notice to estimate their new tax obligation, but the exact amount won’t be known until the city sets the tax rate for next year.
Property owners who disagree with the valuations have until Jan. 15 to appeal based on price or condition, Takara said. They must provide comparative sales that prove their property is worth at least 10 percent less than what the city estimated or construction estimates showing that deferred maintenance has pushed the property at least 10 percent below the city’s valuation, he said.
For more information, call the appeal hotline at 768-7000. It will be open through Jan. 15 from 7:45 a.m. to 4:30 p.m. Questions also may be submitted to bfsrpmailbox@honolulu.gov.
Correction: The current tax rate for owner-occupied homes is $3.50 per $1,000 in value. An earlier version of this story and in Wednesday’s print edition gave an incorrect rate.
