Bill No. 4 TVUProperty Classification

 On Hold with Budget Committee

Private Homes are not Hotels!

History of Bill No. 41 (Ord. 22-7) Quadrupled Property Taxes on legal Transient Vacation Units equal to Oahu’s hotel property tax rate, for those currently paying at residential rates. The bill reclassified TVUs from residential rates to hotel/resort property for tax purposes.  The property tax component of Bill 41 was stripped away and became Bill 4.   This Bill is currently on hold with the Budget Committee as the overall City/ County Budget is balanced.

As originally written, the associated property tax rates (PRT) will increase from 3.5% to 13.9% per $1,000 value (for those currently classified as Residential).  TVUs are not permitted to earn additional income. Hotels are permitted to operate bars, restaurants, and other amenities that earn additional income, which is part of the underlying reason for their higher PRT.

This PRT change is UNFAIR and INEQUITABLE.

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Bill No. 4 sets out a new category of property tax for TVUs with two tiers, which is the first step in changing your property tax rates.  The proposed Tier 1 threshold is set at $600,000 which is much lower than the FOK estimated average TVU value of $1.1m. This lower threshold and higher tax rate is essentially a double whammy on TVU owners. At a high level this generally means for most TVUs your annual property tax will likely double if not more.

Copy of proposed BILL004(22)-CD2: with FOK markups

FOK will inform you of when the Bill is up for discussion or vote with the Budget Committee.  At that time, your action is critical to contact council members, send in written testimony and sign up to testify. Our council contact page has links to forms, etc. for you to quickly and easily participate in the public process. 

Stay Informed. Now is a good time to get on our contact list.

Regardless of what happens to the “structure” of the tax classification new rates will not be set or effective until 7/1/2023. This will not effect your current year property tax payment.