About 842 “ultra luxury” homes on Hawaiʻi Island are worth at least $4 million, and the county’s lawmakers could add a new, higher property tax tier for them.
The Hawaiʻi County Council’s Bill 128 would establish a third tier for residential property taxes, adding to the two existing tiers — one for properties valued under $2 million and the other for over that threshold. It passed through its first council reading on Wednesday.
Earlier this month, County of Hawaiʻi officials said those high-value homes currently net the county about $13 million annually under the current two-tier structure, and supporters say a third tier would add to the county’s revenue equitably.
“This is something that has been looked at by other counties and implemented successfully, and also recommended by people who have been looking a lot at fair and more progressive real property tax structures,” said Councilmember Jennifer Kagiwada during Wednesday’s meeting. She co-introduced the measure along with Councilmember James Hustace.
Most testifiers also supported the tier for the island’s wealthiest property owners, whose taxes would shoulder more of its needed improvements.
Tanya Aynessazian said taxing so-called “ultra luxury” properties at a higher rate is “about proportional participation in our county's economy, our water system, roads, emergency response capacity, infrastructure and payroll — funded by county revenue.”
She added that Hawaiʻi Island communities are “participants in a global luxury market, so let's structure the tax code continuously to ensure that the county remains adequately self-funded, rather than allowing disproportionate value to accumulate passively at the highest tiers in the hands of mega millionaires.”
Aynessazian was a proponent of even more tiers for more expensive homes.
Currently, properties valued at under $2 million have to pay $11.10 per $1,000 of assessed value. The rate grows to $13.60 for those valued over $2 million.
