Homeowner taxes could be lower, hotel rates could go up | News, Sports, Jobs

An increase in taxes for hotels and resorts, short-term rentals and timeshares, as well as for properties worth more than $1.5 million could provide more funding for affordable housing, said committee members, who are hammering out tax rates as they near the end of their review of Mayor Michael Victorino’s proposed fiscal year 2022 budget. The highest-tier categories also have the means to pay more, they added.

Other members, however, said the increase in taxes was unnecessary — especially with no specific project in mind to fund — and that bond funds could be used instead to start the infrastructure work for affordable housing.

The Budget, Finance and Economic Development Committee, which voted 5-3 on Thursday in favor of the proposed rates, will send its proposal to the full Maui County Council, which is scheduled to make a decision on May 14 following a public hearing.

Under the proposal, hotels and resorts could see their current rate of $10.70 per $1,000 of net taxable assessed value jump to $11.75. Timeshares could see rates go from $14.40 to $14.60.

Proposed property taxes for fiscal year 2022 would offer some relief for homeowners in the lowest-tier categories while raising rates on visitor accommodations. The Maui County Council’s budget committee voted 5-3 on Thursday to recommend the proposed taxes for consideration by the full council.
The Maui News / MATTHEW THAYER photo

Short-term rentals that have assessed value less than $800,000 could see rates go from $11.08 to $11.11, while rentals in the second tier from $800,001 to $1.5 million would see a jump from $11.08 to $11.15 and those in the third tier worth $1.5 million and above would see an increase from $11.08 to $11.20.

Victorino had kept tax rates the same for the hotel and resort and timeshare categories in his proposal to the council, while decreasing tax rates in each tier of the short-term rental category. The mayor had cited COVID-19 impacts in his decisions, with the visitor industry among the hardest hit when travel slowed and hotels shuttered.

Both Victorino and the budget committee, however, aim to lower tax rates for owner-occupied homes in the first tier of $800,000 and below, going from the current rate of $2.51 to $2.41. Both have also proposed a slightly lower rate for the second tier of owner-occupied homes worth $800,001 to $1.5 million, from the current tax rate of $2.56 to $2.51. While Victorino sought to keep rates flat for the third tier of owner-occupied homes over $1.5 million, the budget committee is seeking an increase from $2.61 to $2.71.

Rates for the most expensive homes not occupied by the owner would also go up under the budget committee proposal. While both Victorino and the committee are seeking to keep the current rates the same for the first two tiers of the non-owner-occupied category, Victorino proposed an increase from $6.90 to $7.50 for homes valued over $1.5 million and the committee upped it to $8.

Real property taxes are typically the largest source of income from the county. Victorino’s proposed rates would bring in $373.6 million, while the committee’s rates would net $383.2 million, about $9.6 million more, according to committee documents.

For now, there are no concrete plans for the extra funds that would be generated by the increase in taxes.

Voting in favor of the proposed rates were committee Chairwoman Keani Rawlins-Fernandez and Council Members Tamara Paltin, Kelly King, Shane Sinenci and Mike Molina.

Rawlins-Fernandez said she…