I support Bill 142 because Maui residents trying to purchase maui properties in a tax class that IS NOT Owner Occupied are negatively impacted when they must pay the SELLER’s property tax rate for up to a year. That tax burden can be significant. The chances of finding another property that is currently classified as Owner Occupied is low given the high number of homes classified as either Non-Owner Occupied, TVR-STRH, or Long Term Rental.
As an example, here are the tax bills for 3 homes in the same development with the same floor plan and similar market value on the Maui County Property Tax site:
Property 1 - currently classified as Owner Occupied with a Homestead exemption. A Maui resident would be responsible for some portion of $3,500/year.
Property 2 - currently classified as Non Owner Occupied. A Maui resident would be responsible for some portion of $17,100/year.
Property 3 - currently classified as TVR-STRH. A Maui resident would be responsible for some portion of $29,095/year.
This tax burden can be significant for affordability AND it can hinder qualification for mortgage loans. At least one local credit union said they could only consider the current tax bill shown on the county website when calculating debt to income ratio. That current tax bill is clearly not the taxes I will eventually be paying. But that is not what they can consider.
Please end this practice so Maui Residents with a current a homestead exemption in the owner occupied tax class can “take their exemption with them and be granted the lower tax rate immediately upon closing on the new home”.
I have a recommendation that language be added to this bill to apply to any properties closing during the current tax year even if the bill isn’t passed until April, May, or June. That way Maui Residents that are currently in this situation can receive refunds or credits for the higher taxes already paid.
I support Bill 142 because Maui residents trying to purchase maui properties in a tax class that IS NOT Owner Occupied are negatively impacted when they must pay the SELLER’s property tax rate for up to a year. That tax burden can be significant. The chances of finding another property that is currently classified as Owner Occupied is low given the high number of homes classified as either Non-Owner Occupied, TVR-STRH, or Long Term Rental.
As an example, here are the tax bills for 3 homes in the same development with the same floor plan and similar market value on the Maui County Property Tax site:
Property 1 - currently classified as Owner Occupied with a Homestead exemption. A Maui resident would be responsible for some portion of $3,500/year.
Property 2 - currently classified as Non Owner Occupied. A Maui resident would be responsible for some portion of $17,100/year.
Property 3 - currently classified as TVR-STRH. A Maui resident would be responsible for some portion of $29,095/year.
This tax burden can be significant for affordability AND it can hinder qualification for mortgage loans. At least one local credit union said they could only consider the current tax bill shown on the county website when calculating debt to income ratio. That current tax bill is clearly not the taxes I will eventually be paying. But that is not what they can consider.
Please end this practice so Maui Residents with a current a homestead exemption in the owner occupied tax class can “take their exemption with them and be granted the lower tax rate immediately upon closing on the new home”.
I have a recommendation that language be added to this bill to apply to any properties closing during the current tax year even if the bill isn’t passed until April, May, or June. That way Maui Residents that are currently in this situation can receive refunds or credits for the higher taxes already paid.
Thank you for your time.