Except as exempted or otherwise taxed, all real property shall be subject to a tax upon 100% of its fair market value determined in the manner provided by ordinance at such rate as shall be determined in the manner provided in Sec. 5A-6.3. No taxpayer shall be deemed aggrieved by an assessment, nor shall an assessment be lowered, exemption or dedication allowed, or tax rate classification changed, except as the result of a decision on an appeal as provided by law.
(Ord. No. 394, July 1, 1981; Ord. No. 420, January 1, 1983; Ord. No. 1120, July 25, 2022)
For real property tax purposes, "tax year" shall mean the fiscal year beginning July 1st of each calendar year and ending June 30th of the following calendar year. Real property shall be assessed as of October 1st preceding each tax year and taxes shall be levied thereon in the manner and at the time provided in this Chapter.
(Ord. No. 394, July 1, 1981; Ord. No. 517, December 9, 1987; Ord. No. 920, December 14, 2011)
Unless a different meaning is clearly indicated by the context, as used in this Section:
(a) 
"Net taxable real property" means the fee simple fair market value of property determined pursuant to this Chapter, which the Director certifies as the tax base as provided by law less exemptions as provided by law and, in all cases where appeals from the Director's assessment are then unsettled, less fifty percent (50%) of the value in dispute.
(b) 
The Council shall annually set the tax rates, and valuation thresholds for any tiered tax rates (maximum of three (3)), for the classes of real property established in accordance with Section 5A-6.4. A resolution setting the tax rates and valuation thresholds shall be adopted on or before June 20 preceding the tax year for which property tax revenues are to be raised according to the following procedures:
(1) 
The Council shall advertise its intention to set the tax rates and valuation thresholds, and the date, time, and place of a public hearing in a newspaper of general circulation. The date of the public hearing shall be not less than ten (10) days after the advertisement is first published and shall set forth the proposed tax rates and valuation thresholds to be considered by the Council.
(2) 
After the public hearing provided for in Paragraph (1) of this Subsection, the Council shall re-advertise and reconvene within three (3) weeks to adopt a resolution setting the tax rates for the tax year for which property tax revenues are to be raised. The advertisement shall state the rates and valuation thresholds proposed to be set and the date, time, and place of the meeting scheduled for setting such rates. The date, time, and place of the meeting shall also be announced at the public hearing required by Paragraph (1). If the resolution setting the tax rates and valuation thresholds is not adopted within three (3) weeks from the public hearing required by Paragraph (1) of this Subsection, the Council shall again advertise and meet as required by Paragraph (1).
(3) 
If, after adopting the proposed tax rates and valuation thresholds as provided by Paragraphs (1) and (2) of this Subsection, the Council determines that it requires a further increase or decrease in a tax rate or fails to act in any specified period, the Council shall re-advertise and follow the requirements of Paragraphs (1) and (2).
(c) 
The Council shall set the tax rates for each class of real property for a tax year using the following method:
(1) 
Net taxable real property within each class shall be assigned a percentage of the total revenue to be derived from all real property.
(2) 
The percentage of revenue to be raised from net taxable real property within each class shall be multiplied by the total revenue to be raised from all real property in order to determine the amount of revenue to be derived from that class.
(3) 
The amount of revenue to be raised from each class shall be divided by the net taxable real property of that class to determine the applicable tax rate. The tax rate shall be expressed as a dollar amount per one thousand dollars ($1,000.00) of net taxable real property.
(d) 
The Council shall notify the Director of the tax rates and valuation thresholds set for a tax year before the commencement of that tax year. Upon receipt of the notification, the Director shall employ such rates in the levying of property taxes as provided by this Chapter.
(e) 
The Director shall, on or before March 15 preceding the tax year, furnish the Council with a calculation certified as being as nearly accurate as may be, of the net taxable real property within the County, separately stated for each class established in accordance with Sec. 5A-6.4, plus such additional data relating to the property tax base as may be necessary.
(f) 
Insofar as the validity of any tax rate is concerned, the provisions of Subsections (b) and (e) of this Section as to dates, shall be deemed directory; provided that all other provisions of Subsections (b) and (e) and all provisions of Subsections (c) and (d) of this Section shall be deemed mandatory.
(g) 
Notwithstanding any provision to the contrary, there shall be levied upon each individual parcel of real property taxable under this Chapter a minimum real property tax of one hundred fifty dollars ($150.00) per year, except as follows:
Type of Property
Minimum Tax
Department of Hawaiian Home Lands property as defined by Sec. 5A-11.23(a)
$0
Public utilities that have elected to be taxed pursuant to Sec. 5A-8.3(e)
$0
Roads that exist as individual parcels, lots, or common elements
$0
Public property that is exempt pursuant to Sec. 5A-11.17
$0
Homeowners with income exemption per Sec. 5A-11.4(d)
$75
Island of Ni'ihau
$40,000
The solid waste fee, or any other fee applicable to an owner's property, is not a tax, and is not counted toward the minimum real property tax.
The Council at any time may, and upon any significant change of use (e.g., which could follow change of ownership) involving the island of Ni'ihau shall, amend the minimum tax that shall be levied upon the island of Ni'ihau, including abolishment of the minimum tax.
(Sec. 5-1.1, R.C.O. 1976; Ord. No. 394, July 1, 1981; Ord. No. 518, December 9, 1987; Ord. No. 561, December 27, 1989; Ord. No. 915, November 16, 2011; Ord. No. 920, December 14, 2011; Ord. No. 932, September 5, 2012; Ord. No. 953, August 28, 2013; Ord. No. 1130, September 12, 2022Ord. No. 1144, December 16, 2022; Ord. No. 1150, July 31, 2023)
(a) 
For purposes of tax rates, real property shall be classified into one (1) of the following general classes according to the property's actual use, and vacant property shall be classified as zoned until actual use is established, unless otherwise provided in this Chapter:
(1) 
Non-Owner-Occupied Residential.
(2) 
Vacation Rental.
(3) 
Commercial.
(4) 
Industrial.
(5) 
Agricultural.
(6) 
Conservation.
(7) 
Hotel and Resort.
(8) 
Owner-Occupied.
(9) 
Owner-Occupied Mixed-Use.
(10) 
Long-Term Affordable Rental.
(b) 
When property is divided into condominium units, each unit shall be: (1) classified based on its actual use into one (1) of the general classes in the same manner as other property, and (2) deemed a parcel and assessed separately.
(c) 
Parcels that are used for no other purpose than as the owner's principal residence shall be classified as Owner-Occupied provided that the owner has applied for and has been granted a home exemption according to Section 5A-11.4. Notwithstanding any provision in this Chapter to the contrary, if a Home Exemption is disallowed pursuant to Section 5A-11.1(e), the tax classification shall be reclassified and reassessed and taxes for those years shall be recalculated without the exemption, and the assessment cap reset, at the same time the exemption is disallowed. Additionally, where the disallowance of the Home Exemption is made for up to three (3) tax years (current plus two (2) prior) as allowed under Section 5A-11.1(e), a taxpayer who benefited from the three percent (3%) assessment cap shall have the assessment reset to the actual market value in those affected tax years. The Owner-Occupied class shall also include parcels used as the owner's principal residence that are being assessed according to their agricultural use as provided in Section 5A-9.1; provided that the owner has been granted a Home Exemption and no portion of the parcel be used for a purpose other than the owner's principal residence and agriculture. Dedicated land, as defined in Section 5A-9.1, on which refining or industrial use occurs shall not qualify for the Owner-Occupied class. The Owner-Occupied class shall also include parcels used as day care centers by licensed day care providers; provided that the owner has been granted a Home Exemption, no portion of the parcel is used for any other commercial activity, and that owner has provided a current copy of their day care provider license or their tenant's day care provider license to the Director on or before September 30 prior to the applicable tax year. The Owner-Occupied class shall also include parcels that have multiple living units, one of which is used as the taxpayer's principal residence as of the date of the assessment and the taxpayer has applied for and received a Home Exemption, and the other living units are used as Long-term Affordable Rentals and the taxpayer has applied for and they have been deemed as Long-Term Affordable Rentals by the Real Property Division, and no other non-qualified uses are present for any given year.
(d) 
If a property has multiple actual uses, it shall be classified as the use with the highest tax rate, unless it satisfies the criteria for classification as Owner-Occupied Mixed-Use set forth in Subsection (e). To determine the "highest tax rate" if a class has tiered tax rates, the lowest tier tax rate shall be used. Tax rates of the prior tax year shall be used to determine the "highest tax rate."
(e) 
Parcels that are used for multiple purposes, one of which is use as the taxpayer's principal residence as of the date of assessment, shall be classified as Owner-Occupied Mixed-Use, provided that the taxpayer has received a Home Exemption on the property pursuant to Section 5A-11.4 and that the taxpayer's use of the property as their principal residence does not constitute a minor or ancillary use of the entire parcel. Notwithstanding any provision in this Chapter to the contrary, if a Home Exemption is disallowed pursuant to Section 5A-11.1(e), the tax classification shall be reclassified and reassessed and taxes for those years shall be recalculated without the exemption, and the assessment cap reset, at the same time the exemption is disallowed. Additionally, where the disallowance of the Home Exemption is made for up to three (3) tax years (current plus two (2) prior) as allowed under Section 5A 11.1(e), a taxpayer who benefited from the three percent (3%) assessment cap shall have the assessment reset to the actual market value in those affected tax years.
(f) 
Notwithstanding any provision in this Chapter to the contrary, if during an assessment year, the actual use of a parcel is found to be not in conformance with its tax classification and that a higher tax rate would result if the parcel were classified according to its actual use, the parcel shall be reclassified and reassessed and taxes for those years during which such actual use failed to conform with the classification for up to three (3) tax years (current plus two (2) prior) shall be recalculated, and if applicable, without the exemption, and the assessment cap reset, at the same time the exemption is disallowed.
(g) 
The Long-Term Affordable Rental class shall include parcels that have applied for and have been deemed a Long-Term Affordable Rental and residential leases of state-owned property pursuant to Section 5A-11A.1. The Long-Term Affordable Rental class shall also include parcels used as day care centers by licensed day care providers; provided that the owner is renting a Long-Term Affordable Rental to a tenant in accordance with Section 5A-11A.1, no portion of the parcel is used for any other commercial activity, and that owner has provided a current copy of their tenant's day care provider license to the Director on or before September 30 prior to the applicable tax year. Notwithstanding any provision in this Chapter to the contrary, if the beneficial tax rate for property used as Long-Term Affordable Rental and residential leases of state-owned property is revoked pursuant to Section 5A-11A.l(e). the tax classification shall be reclassified and reassessed and taxes for those years shall be recalculated without the beneficial tax rate, and the assessment cap reset at the same time the beneficial tax rate is revoked. Additionally, where the revocation of the beneficial tax rate is made for up to three (3) tax years (current plus two (2) prior) as allowed under 5A-11A.1(e). a taxpayer who benefited from the three percent (3%) assessment cap shall have the assessment reset to the actual market value in those affected tax years.
(h) 
The owner may appeal the property's tax rate classification to the Board of Review as provided in Article 12.
(Ord. No. 920, December 14, 2011; Ord. No. 953, August 28, 2013; Ord. No. 971, September 3, 2014; Ord. No. 972, September 16, 2014; Ord. No. 973, September 16, 2014; Ord. No. 977, October 24, 2014; Ord. No. 978, October 24, 2014; Ord. No. 1038, August 29, 2018; Ord. No. 1089, February 4, 2021; Ord. No. 1120, July 25, 2022; Ord. No. 1130, September 12, 2022; Ord. No. 1132, September 26, 2022; Ord. No. 1146, February 24, 2023[1]; Ord. No. 1150, July 31, 2023; Ord. No. 1162, September 26, 2024; Ord. No. 1168, January 31, 2025; Ord. No. 1170, April 9, 2025)
[1]
Editor's Note: Ord. No. 1146 sunset date September 30, 2023.