Timeshare Owner Appeals For Tax Rate Cut

A timeshare owner protested the highest tax rates in the county Wednesday night during a public hearing on county real property tax rates for the 2007 budget – which does not include any reductions for timeshares.

Part-time Kihei resident Richard Ellis said the tax rate on his timeshare condominium “is not” a real property tax rate.

Ellis and his fellow timeshare owners pay the highest real property tax rate, $14 per $1,000 valuation.

But he said a homeowner living right next to him qualifies for the lowest rate, $3.50, which Mayor Alan Arakawa has proposed to cut to $2.14.

Ellis disputed the argument that timeshares generate more profits than hotels and said they do not have amenities that hotels provide.

But hotel/resort properties are taxed at a lower rate, $8.30.

Ellis was one of two people to testify at the Maui County Council public hearing on real property tax rates for the fiscal year 2007.

In the council Budget and Finance Committee’s continuing review of the proposed budget, Chairman Dain Kane proposed a higher tax rate for homeowners, $2.50, but recommended the council also increase the home exemption by $100,000 to offset soaring property values.

Council members offered no comments during the hearing on what actions they may take on tax rates or other measures affecting real property tax revenues.

During the hearing, the only other person to speak was Haiku resident Melissa Prince, who said she is with the tax reform group COMET, or the Committee For More Equitable Taxation.

She said the group believes that the county’s circuit breaker option for low-income homeowners and increased homeowner exemptions fall short of what is needed to provide tax relief.

They “are not tax reform,” Prince said, and called for lower tax rates as the primary way to relieve soaring tax bills.

She said there also needs to be tax relief for landlords who offer long-term affordable rentals, which do not qualify for the lowest tax rate.

The rate for improved residential properties is $5.86, with both Arakawa and Kane recommending slight cuts in the rate but no exemptions for long-term rentals that don’t qualify for the homeowner rate.

After the hearing, Prince said that COMET considers the mayor’s and Kane’s proposals “diddling” with taxes

Although no one appeared at the hearing Wednesday, the Hawaii Committee of the American Resort Development Association provided a written statement urging a reduction in the tax rate for timeshares. The committee is the trade organization for the timeshare industry in Hawaii

It called for a tax rate that matched the rate for hotels and resorts, noting that timeshare users also contribute to the economy with their spending.

“Timeshare units comprise only about 8 percent of the total visitor accommodations on Maui, but bring over 100,000 visitors who spend over $150 million in Maui’s economy annually,” the organization said.