Bill 40 (2022): Protect homeowners by increasing property tax exemption

The following testimony was submitted by the Grassroot Institute of Hawaii for consideration by the Honolulu City and County Council Committee on Budget on April 4, 2023.

April 4, 2023
9 a.m.
Honolulu City Council Chambers 

To: Honolulu City and County Council, Committee on Budget
      Councilmember Radiant Cordero, Chair
      Councilmember Matt Weyer, Vice Chair

From: Grassroot Institute of Hawaii
           Ted Kefalas, Director of Strategic Campaigns


Comments Only

Dear Chair and Committee Members:

The Grassroot Institute of Hawaii would like to offer its comments on Bill 40 (2022), which would increase Honolulu’s property tax home exemption by $10,000.

This increase would apply to both the standard home exemption, which currently is $100,000, and the home exemption for individuals 65 years of age and older, which is $140,000.[1]

Two CD1 amendments proposed for this bill would increase the standard home exemption by $20,000, instead of $10,000. We support either of these proposed amendments.

Councilmember Esther Kiaʻāina’s amendment would increase the exemption amount for homeowners 65 years of age and older by $20,000 as well, while councilmember Matt Weyer’s amendment would increase the exemption for older homeowners by $40,000.

We suggest that higher exemption value for older homeowners be retained in whichever amendment advances, if either.

The current exemptions were increased in 2019. Since then, Honolulu property values have  skyrocketed. In January 2019, the median sales price of a single-family home was $767,500.[2] Four years later, it had risen to $970,000[3] — an increase of more than 26%.

Increasing the homeowner exemption by $20,000 would not fully offset that increase, but it would be close.

Consider that Kauai and Maui counties both offer home exemptions much higher than Honolulu’s — $160,000 and $200,000, respectively[4] — so they are closer in line with offsetting the higher property assessments Hawaii has been experiencing in recent years.

To simplify matters for the future, this measure could be amended to index the exemptions to the Honolulu consumer price index for all urban consumers, so homeowners would not be robbed of their tax relief simply because of inflation. This would automatically change the exemption each year to offset inflation.

Across the country, such “homestead exemptions” are common practice. They are intended to protect homeowners who live in their homes from dramatic increases in their property taxes. We commend the Council for seeking to increase it to protect Honolulu’s homeowners.

Thank you for the opportunity to testify.


Ted Kefalas
Director of Strategic Campaigns
Grassroot Institute of Hawaii

[1]Relating to Real Property Tax Exemptions,” Bill 2 (2019), Ordinance 19-7.
[2]Statewide Housing Statistics,” Title Guarantee Hawaii, January 2019.
[3]Statewide Housing Statistics,” Title Guarantee Hawaii, January 2023.
[4] Kauai County Code, Article 11. Exemptions, Sec. 5A-11.4 Homes; and Maui County Code of Ordinances, Chapter 3.48, Article IX. 3.48.450 – Homes—standards for valuation, accessed Feb. 23, 2023.

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