Oahu tax assessments for 2009

Oahu's tax assessments for 2009 have arrived.  And the news is... an overall increase in property values!  The percentage decreases on the regional map below might appear shocking, however Oahu's overall value put into dollars is an increase from $190.7 billion in the prior year to $191.1 billion this year.  That doesn't sound as bad. 

How does the increase in Oahu's land values tie in with some significant decreases reflected above?  The answer is, a big portion of the most valuable property on the island is in Honolulu and Diamond Head.  This is where we see the downtown office buildings, Waikiki and a significant portion of the island's population.  Other areas, such as the North Shore, Kailua, Kaneohe, Kahuku, Makaha and Waianae are less populated.  While the percentage decreases in these neighborhoods are larger, they also have greater proportions of government and preservation properties, which have low tax assessed values.

What does this mean for buyers?

The market is weak, which is good for buyers.  We're seeing lower prices in many areas.  In conjunction with lower interest rates that are emerging, affordability is increasing.

Prices in town (Honolulu) are sometimes down, however sellers are reluctant to sell at great discounts and may just take their properties off the market.  Some will be forced to sell due to economic conditions and buyers may pickup some deals.  Be prepared - get prequalified for a loan and have your cash ready! 

Decreased assessed values also translate to lower real estate taxes.  This can help reduce your monthly payments.

What does this mean for sellers?

Your home values may be down from last year and this might not be the top of the market in your neighborhood.  On the other hand, most property owners who bought a few years ago have substantial equity.  If you feel that Hawaii home sales will remain weak for years, this could be a great time to lock in a gain and have that cash available for future needs. 

If you elect to hold on to your property, your tax payments should be lesser than before, unless the City and County of Honolulu elects to increase tax rates. 

While the City is facing tough economic times, City Council members are keenly aware that a property tax rate increase will be unpopular with voters.  The Council will be looking at improving government efficiency and cost cutting before they consider rate increases.

Don't forget your property tax exemption

If you're a homeowner and owner occupant, you qualify for an exemption of at least $80,000 in tax assessed value.  The exemption increases to $120,000 for owner occupants age 65 and older.  The exemption reduces your tax assessed value and the amount of real property tax due.  This exemption applies to owner-occupied properties, not investment properties.

Apply for your homeowner's property tax exemption online here: Oahu property tax exemptions

Note: Your realtor and/or your escrow officer will usually help you with the homeowner's exemption when you purchase your property.  If you buy the property as an investment and later decide to use it as your residence, it is important to keep this exemption in mind.

Is your tax assessed value too high?

If you feel your assessed value is higher than it should be, appeals forms will be available online at www.realpropertyhonolulu.com.  Your completed form must be mailed along with a $25 check payable to the City and Count of Honolulu for the (nonrefundable) appeal fee.

Make sure and explain why you feel that your property is worth less than the assessed value.  Simply asking for a reduction in the assessed value without reasoning will not be effective.

Aloha, Mike

Hawaii homes