Question: For the past 13 years, I have been renting out a unit that I own. I just heard about a new rule that will triple my property taxes unless I file a certain form by the end of the month. The letter from the city wasn’t mailed to me. It was mailed to the apartment, so my tenant got it. Fortunately, the tenant forwarded it to me. Without this form, my property taxes would rise, and I would have to raise the rent, which would hurt the tenant. Please find out more. I’m probably not the only landlord in this situation.
Answer: You apparently own one of about 8,000 condominiums in 45 Oahu buildings affected by a tax-reform measure approved last spring. Under Ordinance 17-13, eligible owners in complexes zoned for mixed use, hotel or commercial use have until Sept. 1 to dedicate certain property for residential use or lose the lower property tax rate that comes with that classification.
Honolulu Star-Advertiser reporter Andrew Gomes reported in June (808ne.ws/6152017) that the city was mailing out letters explaining the change to owners of condos that permit flexible use as residences, office space or hotel rentals. Owners who fail to mail or hand-deliver the form on or before Sept. 1 will have their property placed in the highest allowable tax category.
The residential rate is $3.50 per $1,000 of assessed value, the commercial rate is $12.40 per $1,000 and the hotel/resort rate is $12.90 per $1,000. So the annual tax bill on a $400,000 condo would be $1,400 at the residential rate, $4,960 at the commercial rate and and $5,160 at the hotel/resort rate.
Find the necessary form (BFS-RP-P-41E), instructions on how to submit it and a list of affected buildings at 808ne.ws/condoform; most of the properties are in Waikiki. If you have questions, call the city’s Real Property Assessment Division at 768-3799.
Q: How long must the unit be dedicated to residential use?
A: Five years, either as the owner’s primary residence or as a long-term rental (for more than 30 days at a time). The dedication is automatically renewable for additional five-year periods.
Q: If I sell the condo, does the rate transfer to the new owner?
A: No. It would continue for the remainder of the dedication period but not automatically renew, according to the city. The new owner would have to file their own petition for the residential classification after that.
Q: Do I have to do this even if my unit is classified residential under the old system?
A: Yes, if it’s in a mixed-use building. “This Residential Use Dedication will replace any previous methods by which condominiums on non-residential zoned lands were allowed to be classified as residential. Previously approved Declaration Regarding Condominium Use forms are deemed to be invalid. A home exemption will no longer automatically qualify a property for a classification as residential,” according to RPAD’s website.
Mahalo
Thank you to the homeowner on the corner of Likini and Ala Lilikoi streets in Salt Lake. I’m a daily walker, and my brand-new visor flew off my head and landed in your yard. I wasn’t able to retrieve it, but you placed it on your wall and I was happy to see it and retrieve it the next day. — Mahalo, grateful senior
Mahalo
Thank you to the Avocado Angel who left a bag of avocados on my doorstep. I live in St. Louis Heights and work long hours, mostly nights, and don’t get to socialize much with the neighbors. So imagine my surprise when I came home from work one evening and found a bag of avocados to greet me. The Avo Angel didn’t leave a note. No one I’ve asked has a tree or a clue. Thank you for sharing your bounty. Please know that your kindness was appreciated. I am even more grateful to be living in the neighborhood. — R.M.
