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Sure. Why compare a major city property tax rate with a rural area.
A 900 sq ft place in San Francisco is going to run over $10,000/year - in Dallas a 900 sq ft luxury condo will set you back over $5,000 year in property taxes. Honolulu as a major city is a relative bargain with property taxes.
Again, they make up for it in other areas you're conveniently not discussing. For example, I pay over $2,800/mo (that's MONTH, not year) for my small office building in town on a tiny 6,000 SF lot. I pay 1.24% vs residential that's only 0.35%. No exemptions whatsoever. Pay full pop. Nearly 50% of all city property tax revenue comes from commercial, industrial and hotel which is all 1.24% or more... which is HIGHER than SF's rate.
Oh, and SF doesn't collect 4.5% on every penny of rent either. Or drugs, healthcare, utilities, etc etc etc.
Our state income tax is also higher than Cali's.
So yes, our residential tax rate is low but our city and state government does a splendid job in making up for it in other areas.
Again, they make up for it in other areas you're conveniently not discussing. For example, I pay over $2,800/mo (that's MONTH, not year) for my small office building in town on a tiny 6,000 SF lot. I pay 1.24% vs residential that's only 0.35%. No exemptions whatsoever. Pay full pop. Nearly 50% of all city property tax revenue comes from commercial, industrial and hotel which is all 1.24% or more... which is HIGHER than SF's rate.
Oh, and SF doesn't collect 4.5% on every penny of rent either. Or drugs, healthcare, utilities, etc etc etc.
Our state income tax is also higher than Cali's.
So yes, our residential tax rate is low but our city and state government does a splendid job in making up for it in other areas.
That’s quite a bit of misinformation.
6,000 sq ft in SF will in nearly all cases run you over $5,000/month in property taxes.
Want to buy a car in SF? The tax on a $40,000 vehicle will run you over $3,200 which is dramatically higher than HNL.
And who the heck really as a renter pays GET tax? The landlord. And ultimately that’s tax deductible. You can’t possibly pay that much GET on drugs or utilities to make it statistically significant. Groceries will run you 8.5% tax in SF.
Let’s play the property game. Let’s buy a 1,800 sq property in a somewhat desirable area and rent it.
In SF you’ll pay over $20K per year in property tax. In Honolulu you’ll probably pay $2,500 per year in property tax and maybe $2,000 in GET in rental income. Which is better?
As a homeowner in both Honolulu and SF you really don’t know how well you have it tax wise.
And don’t get me started on bridge tolls ($7.75 for golden gate) or higher gas prices in California
6,000 sq ft in SF will in nearly all cases run you over $5,000/month in property taxes.
Want to buy a car in SF? The tax on a $40,000 vehicle will run you over $3,200 which is dramatically higher than HNL.
And who the heck really as a renter pays GET tax? The landlord. And ultimately that’s tax deductible. You can’t possibly pay that much GET on drugs or utilities to make it statistically significant. Groceries will run you 8.5% tax in SF.
Let’s play the property game. Let’s buy a 1,800 sq property in a somewhat desirable area and rent it.
In SF you’ll pay over $20K per year in property tax. In Honolulu you’ll probably pay $2,500 per year in property tax and maybe $2,000 in GET in rental income. Which is better?
As a homeowner in both Honolulu and SF you really don’t know how well you have it tax wise.
And don’t get me started on bridge tolls ($7.75 for golden gate) or higher gas prices in California
Misinformation? LOLLLLLLLLLL
I don't have enough L's to properly convey my message.
Post a link to a 6,000 SF property in SF with 1,680 SF (my office size) of residential, office, whatever, where they pay $5,000/mo. I call BS. Let's see proof (*sound of crickets*).
Many people in SF don't need cars. Good luck getting away without a car in Honolulu. You did notice that I spoke about rent, utilities, healthcare and drugs (which again, SF does NOT charge tax on). How much do people in Honolulu pay for groceries vs rent?? Give me a break.
You mention "as a homeowner"... again, I own commercial property in Honolulu... and the tax rate is nearly 4X more than residential... and Honolulu has 4X to 8X the hotel/commercial/industrial tax assessments of most other cities and 90% more than SF. I am simply stating that the city makes up for it in other areas. We can charge less for residential because the city rakes it in with hotel and other commercial property. This isn't rocket science here. Robbing Peter to pay Paul. Did you ever hear that Hawaii is consistently ranked DEAD LAST in the nation for being business friendly? My property taxes prove that. SF charges the exact same tax rate to businesses as they do homeowners. Here, businesses pay 4X++ more on the tax RATE ... then it's coupled with insane property valuations that ultimately screw business/property owners. 6K SF of land and 1,680 SF of office in a so-so area in Honolulu and the city's valuation is a hair under $3 MILLION.
While I don't have time to go on a real estate hunt for you - 181 Fremont has a unit for sale for $5.63 million with HOA at $2,400./month. Property tax will run you a tad over $5,000 month. 1,882 sq ft condo, so you actually have it good with 6,000 total sq ft of land.
While I don't have time to go on a real estate hunt for you - 181 Fremont has a unit for sale for $5.63 million with HOA at $2,400./month. Property tax will run you a tad over $5,000 month. 1,882 sq ft condo, so you actually have it good with 6,000 total sq ft of land.
Good grief.
My point is the property tax rate is actually HIGHER in Honolulu than SF for ALL classifications except residential.
I'm all for increasing the real property tax rate for residential IF they reduce the rate for businesses... but we all know that will never happen. So don't feel like the city is doing us a favor with their seemingly low tax rates... they are not.
I'm all for increasing the real property tax rate for residential IF they reduce the rate for businesses... but we all know that will never happen. So don't feel like the city is doing us a favor with their seemingly low tax rates... they are not.
Us a favor? You mean you a favor? Most people don’t own businesses subject to property taxes. And the spirit of the thread was residential property tax.
Regardless, considering Hawaii is in the middle of the Pacific Ocean 2,500 miles or so from the mainland - the tax burden in my opinion is reasonable - what does one expect? It’s certainly not as bad as SF, NYC, Boston, etc.
Hawaii should be way more expensive than it is. And it used to be. People forget high phone bills just to call interisland, gas compared to mainland used to much higher, food compared to mainland was higher, and nowadays at least Oahu has close parity to the West Coast.
Lastly, I would be in favor in raising residential property tax rates if the increases went to the school system.
Lastly, I would be in favor in raising residential property tax rates if the increases went to the school system.
Agree or not with its need and existence, future funding of the the rail project has all but guaranteed future escalations in property tax rates for Oahu residential home owners. It is now just a matter of when
and how much.
Us a favor? You mean you a favor? Most people don’t own businesses subject to property taxes. And the spirit of the thread was residential property tax.
Regardless, considering Hawaii is in the middle of the Pacific Ocean 2,500 miles or so from the mainland - the tax burden in my opinion is reasonable - what does one expect? It’s certainly not as bad as SF, NYC, Boston, etc.
Hawaii should be way more expensive than it is. And it used to be. People forget high phone bills just to call interisland, gas compared to mainland used to much higher, food compared to mainland was higher, and nowadays at least Oahu has close parity to the West Coast.
Lastly, I would be in favor in raising residential property tax rates if the increases went to the school system.
No, I mean us a favor. You do realize that these high property tax rates get passed on to residents, right? Or are you in the mindset that the business just magically eats it somehow? At the end of the day, every penny of these high property tax rates end up costing all residents more money whether it be in utilities, services, products, etc. In fact, commercial tenants pay the real property tax directly to the landlord in their CAM fees. It's charged ON TOP of the rent... unlike residential where it's generally included in the monthly rent.
As a local business owner (over 20 years in biz) I can tell you that Hawaii is an extremely hostile place to do business and every study ever conducted echoes that. Creating tax structures that are inordinately lopsided only makes us less attractive for businesses to set up shop here in the middle of the Pacific. Personally, I would leave the residential tax rate exactly where it is (0.35%) as long as you're either physically living in the home or it's actively being rented. Those that purchase homes here and sit on them (i.e. outside investors that land bank properties) should pay the commercial rate of 1.24% on the entire valuation. Rates should also be graduated for everyone else... 0.35% for any SFH or condo property up to $1M... 0.45% for $1M-$1.5M ... 0.55% for $1.5M-$2M and any valuation over $2M is 1%. So if you own a $1.5M property, you pay 0.35% for the first million and 0.45% for the $500K. It's not all or nothing like how they originally had the Class A classification. Having to pray every year that your rental home doesn't surpass the $1M threshold is ridiculous. But that is our city for you.
The scary thing that you fail to note is that property tax valuations have more than doubled in the last 7 years... and on top of that the hotel tax RATE increased and the new Class A tax rate was established. Valuations way up... rates up... and once it's all said and done the city is raking in nearly 2X more revenue from just 7 years ago. Let that wrap around your head. What cost twice as much today compared to 7 years ago? Nothing... but your property taxes. That is about 4X-5X more (PER YEAR) than the local CPI and US inflation rate. The $10 BILLION rail, which is the most expensive rail system in the WORLD (per mile) isn't even being funded *yet* by our property taxes. Get ready.
The one thing about our politicians here is that they are smart. Damn smart. Business owners like myself amount to 0.5% of the voter base? Perhaps less? So the city can increase rates on commercial, industrial, hotel with very little negative feedback from residents because they aren't the ones cutting the bigger checks. So they get these increases approved akin to rubber stamping with very little push back from the public, if any at all... they are virtually invisible to 99.5% of the population but it slowly increases the cost of living for every resident in the island and then they blame the businesses for being greedy because they had to raise their costs. Our government needs to understand that small business is the lifeblood of our economy. If it weren't for a nearly star-aligned tourism industry over the last ~8 years or so, the tune would be very, very different.
I'm completely perplexed as to why you think Hawaii should be way more expensive than it is. It's already among the most expensive places to live in the US and the world. Just because you aren't cutting those massive checks to the city every 6 months doesn't mean we should be increasing taxes. Someone else is paying them on your behalf.
The scary thing that you fail to note is that property tax valuations have more than doubled in the last 7 years
I'm completely perplexed as to why you think Hawaii should be way more expensive than it is. It's already among the most expensive places to live in the US and the world. Just because you aren't cutting those massive checks to the city every 6 months doesn't mean we should be increasing taxes. Someone else is paying them on your behalf.
I don’t have time to respond to the entire rant.
Regardless, are there actually property owners complaining their valuations doubled the past 7 year? Oh no, my house in doubled in value these past 7 years / how awful.
Hawaii among the most expensive in the world? Uh, no US city makes the top 10 last I checked in the world.
As far as the US goes, where should Honolulu/Hawaii rank? Like Nebraska? Iowa? Georgia? I mean, why wouldn’t it be the most expensive in the US given it’s location? Really, it should be cheap to live here? I disagree, it should be outrageously expensive but isn’t.
Regardless, are there actually property owners complaining their valuations doubled the past 7 year? Oh no, my house in doubled in value these past 7 years / how awful.
Hawaii among the most expensive in the world? Uh, no US city makes the top 10 last I checked in the world.
As far as the US goes, where should Honolulu/Hawaii rank? Like Nebraska? Iowa? Georgia? I mean, why wouldn’t it be the most expensive in the US given it’s location? Really, it should be cheap to live here? I disagree, it should be outrageously expensive but isn’t.
I can tell you many locals like to keep their properties for a very, very long time to the point where it's very likely that they will never transfer ownership to anyone but a family member (i.e. it NEVER sells). Despite the benefit of being able to borrow some money against the home, many of these people may never bear the fruits of higher property valuations; don't expect people to relate to you and agree higher property taxes are generally a good thing because their net worth has increased.
I can also tell you every single business owner that doesn't own their property (greater than 95% of all business owners) is not one bit happy with the increased valuations.
Yes, Honolulu is among the most expensive cities in the world. This is a fact that only you can't comprehend. Take ALL the cities in the world equal to our size in population and we would rank in the top 0.1% (yes, that is 1/10th of one percent).
Yes, of course I agree it should be very expensive to live here... and guess what, IT IS. But for you to think it should be much more expensive than it is is quite frankly disturbing. You could get a room of intelligent people together and they would gasp in response to your comments.
Last edited by pj737; 03-19-2018 at 02:15 AM..
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