The $300 property tax credit that Mayor Rick Blangiardi’s administration has proposed to the City Council is a fitting and welcome action at this time, providing all residential property taxpayers a portion of relief from the rising tax burden that follows surging property values on Oahu.

The City Council should approve this relief, which then could be delivered to taxpayers along with this summer’s property tax bills.

Charms flow from its simplicity: Each homeowner who qualifies by residing in the home and holding an active home exemption would automatically receive the one-time $300 tax credit. No additional applications or verifications will be necessary, and the credit applies regardless of property value.

Simplicity is a must if an immediate adjustment to the property tax bills is desired — and it is — since it’s only a matter of weeks before tax bills are distributed.

The proposed tax credit would “cost” approximately $45.5 million in forgone tax collections, but for this year, at least, Honolulu can afford that. That amount has been accounted for in the $3.41 billion, fiscal year 2024 operating budget just submitted to the City Council for review.

The mayor’s fiscal 2024 budget is approximately 6.2% higher than the current budget of $3.22 billion. That is very close to the toll of inflation in Hawaii, and appropriate in keeping city spending stable.

The $300 tax credit translates to the equivalent of an additional, one-time homeowner’s exemption that would waive taxation on approximately $86,000 in home value. About 151,750 owner-occupants on Oahu would qualify.

In December the value of all real property on Oahu rose to $343.07 billion from $305.27 billion, marking a 12.4% increase, according to the city’s Real Property Assessment Division.

Some homeowners — particularly those in highly desirable districts such as the North Shore and Kahala — saw home values jump by as much as 30%. That’s a particularly sticky problem for aging homeowners who stretched to afford a property decades ago that now has leaped in value, should they hope to remain in or pass on their properties.

This one-time credit won’t solve that problem, nor should it. Addressing the intricacies of the relationship between property values and proper taxation will require careful study and targeted approaches that do not give away potential tax revenue to the wealthiest. Careful consideration of effects on the city’s ability to provide services must also be balanced here.

Going forward, other credits and exemptions, including a higher home exemption, could be considered. However, lowering the property tax rate overall would be unwise, as it would be politically hazardous, if not impossible, to reverse course in the future, even if property values were to suddenly plummet, and unnecessarily tie the city’s hands.

One bill currently alive before the City Council, Bill 38, gives limited-income owner-occupants additional relief, and raises eligibility from $60,000 in total household income to 80% of area median income for a two person household, as set by the U.S. Department of Housing and Urban Development. The Grassroot Institute of Hawaii supports this promising bill, noting that a two-person Honolulu household could earn no more than $83,600 a year to qualify, and indexing the amount would modulate the availability of relief as needed.

Currently, all seniors qualify for an additional residential exemption, and homeowners within a few tightly limited categories, such as totally disabled veterans, also qualify for waivers. This tailored approach could be modified incrementally as appropriate, to first target those most in need.