The City & County of Honolulu minimizes the number of property tax appeals that are filed by allowing only a very narrow window in which to file an appeal. The tax assessments are normally mailed on December 15th with January 15th being the cutoff date to file an appeal. Complicating matters are the Christmas Holidays that occur during this period. The usual grounds for justifying an appeal is having the tax assessment exceed the market value of the property by more than 10%. Example: If your market value is $500,000, the tax assessment must be greater than $550,000 to support an appeal. The appeal does not need to include supporting documentation when filed; however, the owner has to provide their opinion of market value. A $25.00 deposit must accompany each appeal.
The residential tax rate is $3.29 per $1,000 of assessed value. This means that if your assessed value is too high by $100,000, your annual property taxes will be too high by $329. I have an appeal pending on a one-bedroom, fee simple condo Mary Lou and I own in Waikiki as a hideaway where the assessed value is too high by about $100,000. I filed the appeal because the assessed value was ridiculously high and I wanted to experience firsthand the appeal process.
Our unit is on the 24th floor of a 29-floor building. The assessed value is about $100,000 higher than the only two sales over the past 20 months of similar one-bedroom, one-bath units in the building plus it is higher than the four out of the five sales of larger two-bedroom, two-bath units. An identical unit directly below us was assessed at almost $100,000 less than our unit. Our building is not one of the newer, prestigious complexes in Waikiki. In calendar year 2006, there were 198 sales of non-beachfront, fee simple one-bedroom units in Waikiki, only one of the 198 sales was as high as our assessed value, etc.
I have difficulty believing the tax assessor ever looked at the 2006 sales data in our building or in Waikiki as a whole prior to establishing the 2007 assessed value for our unit. I believe the tax assessor merely took the 2006 assessed value and added about 20% to it to arrive at a 2007 figure. Neither the 2006 assessed value nor the 20% increase are justified by statistical data. In retrospect the mistake I made was not appealing the 2006 assessed value a year earlier.
When I received the assessment last December, I prepared a lengthy written appeal that I subsequently discovered was not necessary. All I needed to do was pay my $25 and provide them my estimate of value. On August 23rd, I received a letter stating that my case would be heard on September 11th and that I would be allowed 10 minutes to present my case or as an alternative, I could provide written testimony. I chose to provide the written testimony (six copies required) and have yet to hear the results. I was off-island the end of August, but had done considerable work on the appeal last December, so all I needed to do was update if for the past eight months and write a revised appeal. Still, I’ve spent a number of man-hours on this project, something to consider if you expect a written appeal to be successful.
As explained elsewhere in the newsletter, Oahu housing values are declining even though median sales prices do not support that statement. I am concerned that the tax assessors may merely add a healthy percentage to the 2007 assessed values to arrive at 2008 figures. If they do this, many of the 2008 assessed values will be way out of line with Oahu market values. Last year, we were overwhelmed with requests for market analyses in late-December and early-January and unable to respond to all the owners in a timely manner. If you think you might want to appeal your 2008 assessed value, I recommend you establish the market value of your home in October or November vice waiting until after you receive your assessment notice in December.
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Property Tax Assessments
The residential tax rate is $3.29 per $1,000 of assessed value. This means that if your assessed value is too high by $100,000, your annual property taxes will be too high by $329. I have an appeal pending on a one-bedroom, fee simple condo Mary Lou and I own in Waikiki as a hideaway where the assessed value is too high by about $100,000. I filed the appeal because the assessed value was ridiculously high and I wanted to experience firsthand the appeal process.
Our unit is on the 24th floor of a 29-floor building. The assessed value is about $100,000 higher than the only two sales over the past 20 months of similar one-bedroom, one-bath units in the building plus it is higher than the four out of the five sales of larger two-bedroom, two-bath units. An identical unit directly below us was assessed at almost $100,000 less than our unit. Our building is not one of the newer, prestigious complexes in Waikiki. In calendar year 2006, there were 198 sales of non-beachfront, fee simple one-bedroom units in Waikiki, only one of the 198 sales was as high as our assessed value, etc.
I have difficulty believing the tax assessor ever looked at the 2006 sales data in our building or in Waikiki as a whole prior to establishing the 2007 assessed value for our unit. I believe the tax assessor merely took the 2006 assessed value and added about 20% to it to arrive at a 2007 figure. Neither the 2006 assessed value nor the 20% increase are justified by statistical data. In retrospect the mistake I made was not appealing the 2006 assessed value a year earlier.
When I received the assessment last December, I prepared a lengthy written appeal that I subsequently discovered was not necessary. All I needed to do was pay my $25 and provide them my estimate of value. On August 23rd, I received a letter stating that my case would be heard on September 11th and that I would be allowed 10 minutes to present my case or as an alternative, I could provide written testimony. I chose to provide the written testimony (six copies required) and have yet to hear the results. I was off-island the end of August, but had done considerable work on the appeal last December, so all I needed to do was update if for the past eight months and write a revised appeal. Still, I’ve spent a number of man-hours on this project, something to consider if you expect a written appeal to be successful.
As explained elsewhere in the newsletter, Oahu housing values are declining even though median sales prices do not support that statement. I am concerned that the tax assessors may merely add a healthy percentage to the 2007 assessed values to arrive at 2008 figures. If they do this, many of the 2008 assessed values will be way out of line with Oahu market values. Last year, we were overwhelmed with requests for market analyses in late-December and early-January and unable to respond to all the owners in a timely manner. If you think you might want to appeal your 2008 assessed value, I recommend you establish the market value of your home in October or November vice waiting until after you receive your assessment notice in December.
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