LIHUE — Haunani Pacheco’s family has had their Anini property for 108 years. She came to Wednesday’s public hearing to thank the County Council for a bill that, if passed, would allow family members to apply for real property tax exemptions.
“I think it will relieve a lot of tax burdens on some of the families, especially a lot of the Hawaiian families,” she said.
The value of land in Anini and other locations around the island has soared over the years. Family members who have lived on their properties for generations, but whose names are not on titles, could soon qualify for tax relief.
Bill No. 2756 would allow family members the ability to request real property tax exemptions based upon their own eligibility, as long as no living relatives are on title.
A grandparent or other relative, for example, could have died prior to establishing a will or transferring rights. While the bill does not clear title for ownership, which can also be cost-prohibitive, family members residing on the premises may no longer have to face the higher “residential investor” property tax rate.
The amendment also proposes that family members include not only those related by blood but also by marriage, “reciprocal beneficiary relationships,” or step-relatives.
Pacheco, who resides in Kilauea but whose cousins live on the family’s Anini property, said that under the “residential investor” category, the taxes on their home are around $24,000 per year, as the property is valued in the millions.
“Which is quite a burden on our family,” she said. “Most people don’t make that kind of money on this island.”
The valuation of properties is where the true problem lies, she said.
“That’s where the taxes are killing us,” she said, adding that it’s especially true for residents who never plan to sell and want to live on the premises for generations to come.
Presley Wann shared similar sentiments, and is also in favor of the bill. His family has lived in Haena “so far back we don’t even know how far,” he said.
“I’m here to support whatever measures you can help us out with the tax exemptions,” said Wann, who lives on a kuleana lot with multiple owners whose names are not on the title. “We really need help.”
Celebrities surround his home now, and the value of land in the area has skyrocketed. He had to pay around $20,000 in real property taxes one year, which was difficult, as he’s retired and on a fixed income.
Many other families on the North Shore face similar struggles, he said. And many have considered selling their properties just to “keep up with taxes.”
“Whatever help you guys can give us would be a big thing,” he said.
If the bill presented by councilmembers Mason Chock and Luke Evslin passes, a family member, for example, could potentially assign a real property tax rate classification of homestead or commercialized home use.
Additionally, if an applicant can prove they are a lineal descendant of the original titleholder, and if they can prove there is no living person on the title, they can apply for the kuleana exemption, rather than paying higher residential or residential investor rates. But even if they can’t meet the first criteria, they would still be eligible to apply for other provisions, such as the homestead class.
“When a property has been passed down for generations within a family, there can be a large number of owners on title, all of whom are deceased,” Evslin said. “The cost to clear the title can be huge, and in the meantime even if these families qualify in all other respects for the available county tax exemptions and beneficial rates, they can’t apply because there is no living family member on the title.”
The draft bill will be discussed at the next Planning Committee meeting at 8:30 a.m. Wednesday at the Historic County Building council chambers.
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Coco Zickos, county reporter, can be reached at 245-0424 or czickos@thegardenisland.com.
