Longtime Realtor Schuyler "Lucky" Cole wants everyone with property in the controversial Residential A tax class to raise an objection and file an appeal of their tax assessments.

The deadline is Thursday.

The push by Cole, who served on the city’s 2014 Real Property Tax Advisory Commission, reignites the long-running debate over property taxes, the city’s main source of revenues, and who, if anyone, should pay more and pay less.

The Residential A tax class, created in 2013, consists of all Oahu residential properties valued at $1 million or more that do not come under a homeowner exemption. The new class allowed the city to charge owner-occupants and those with properties under $1 million at one rate and absentee owners another, ostensibly because those in Residential A properties are "investors," better able to weather a tax increase.

But there’s been a loud outcry from Residential A owners who are now paying $6 for every $1,000 of valuation, compared with the $3.50-per-$1,000 rate those with homeowner exemptions are paying. Some say they simply never got a homeowner exemption and are living on fixed incomes, or that they risk losing a second property that’s being kept for family purposes.

City Council members quickly passed a resolution allowing those who were eligible for homeowner exemptions — but, for whatever reason, never obtained them — to apply for the exemption and, more importantly, seek a "compromise" tax bill allowing them to pay at the $3.50 rate in 2014.

City tax officials said 653 owners filed claims for the one-time break. Numbers released by the city last week showed homeowners mostly from higher-end neighbor­­hoods like Portlock, Diamond Head-Kahala, Nuuanu-Alewa Heights, Kakaako and Kailua taking advantage of the program.

Savings on tax bills ranged from $309 for a lower Manoa property on Mohala Way to $27,434.50 tax for a property on Noela Street at the foot of Diamond Head. The city, as a result, is getting about $2.6 million less than programmed for the 2014-2015 operating budget, but city officials said they’ve been able to absorb that financial hit without affecting public services.

Cole, CEO of the Haleiwa-based company Team Real Estate, said it was not "ethical, rational, fair or even legal" for Mayor Kirk Caldwell and the Honolulu City Council to carve out a tax class based on their assessed values. Property classes are supposed to be based on how they are used, such as the hotel/resort, agricultural and business classes. "And the only vehicle available to challenge it is through the annual tax appeal process."

What’s making the issue more pressing is that with real estate prices continuing to escalate, more owners will see their properties valued at more than $1 million and pushed into Residential A, he said.

Oahu property owners were sent their assessment values in December. Residential properties went up, on average, about 7.2 percent in 2015.

Along with new housing stock, that pushed the number of properties in the tax class to 8,557 parcels, according to the city’s Department of Budget and Fiscal Services. That’s roughly 12 percent more than the 7,655 properties that were placed into the category originally in 2014.

Cole said he has a list of everyone in the Residential A class and mailed several thousand postcards out urging people to file an appeal.

But Gary Kurokawa, the city’s deputy budget director, said there are only certain issues that can be appealed. Being pushed into the Residential A category, by itself, "is not grounds for appeal … but I’m thinking it would be the value they’d be appealing," he said.

"You can file for denial of a homeowner exemption, you can file for a valuation, and you can file on constitutional issues," Kurokawa said. "It’s the value that most people file on."

Kurokawa acknowledged that the city does not know of other municipalities that split property tax classes based solely on value.

"However, the city and most other municipalities have provisions for separating out owner-occupants and investor properties either by classification or exemptions," he said. "The city went one step further to protect typical renters from escalation of rents to offset increases in real property taxes and developed the split based on the value of properties."

Council Budget Chairwoman Ann Kobayashi said this is the first time she’s heard anyone raise legal concerns about the creation of Residential A. Echoing Kurokawa, Kobayashi said the city created the class only for those nonowner-occupied properties valued at $1 million or more to shield the bulk of renters from needing to pay more.

Most renters live in homes valued at less than $1 million, she said.

Kobayashi noted that former Mayor Mufi Hannemann pushed through a plan in 2009 to split the residential class into owner-occupant and nonoccupant homeowner classes, despite opposition from renters. The two classes were used to determine rates in 2010, with nonoccupant class properties paying at a slightly higher rate. But a year later, Council members voted to eliminate the nonhomeowner class and to again place all residential properties into one class.

The 2014 tax advisory commission, in its final report in November, recommended that the city retain the Residential A class but add all nonoccupant properties into it. But there would be two tiers of rates with owners of properties in that class paying at $3.50 for the first $1 million, just like owner-occupants, and then a higher rate for any value above $1 million.

Cole said he supports the proposal because it would eliminate the so-called "cliff effect" that now exists where the owner of a nonoccupied property assessed at $1 million would pay $2,500 more than someone whose property was assessed at $999,999.

Tom Yamachika, president of the Tax Foundation of Hawaii, said the taxpayers education group does not formally support or oppose legislation. But as a member of the tax advisory commission, he said, he also supports the plan to move all nonoccupants into Residential A under a tiered system.

Yamachika said a number of property owners testified about the burden of paying $2,500-plus more than they had the previous year. The current system "really nails people if they’re around the $1 million (assessment)," he said. "They just kind of fall off the cliff there and that just didn’t seem right to us."

City officials don’t expect a large number of appeals. News stories have detailed how median home prices have been on the rise on Oahu so the increase in assessments "doesn’t seem out of step," Kurokawa said.

With four days to go before Thursday’s deadline, the city says appeal requests are actually about 100 less than a year ago.

"But it’s still early," Kuro­kawa said.

There were 2,141 appeals filed in 2014, more than the 1,514 filed in 2013, city officials said. However, only 224 appeals came from owners of Residential A properties. Over the past five years, the highest number of appeals filed was the 2,447 filed in 2011, but about 500 came from a single condominium address, he said.

The number of appeals in recent years is low from previous years when the city saw 4,000 to 5,000 appeals annually, he said.