New City & County of Honolulu Bill Would Repeal, Replace Honolulu Historic Home Tax Exemption

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Honolulu City Councilmember Ann Kobayashi has introduced a bill to amend the historic residential property tax exemption. CB42 (2012) passed first reading on April 25 and was assigned to the Budget Committee. Next steps are for the committee to hold a public hearing to gather input and decide whether or not to move the measure to second reading before the full council.

CB42 (2012) proposes to repeal the current historic residential property tax exemption, which was only recently revised after a year of public debate and over 10 public hearings that examined the issues of enforceability, accountability, fairness, city revenue collection, preservation impact, and equality.


Despite the recent resolution of this issue, the newly-proposed measure would replace the recently-amended program with another version of a historic preservation tax exemption, assessed as a percentage of the fair market value and whether the current level of taxation is a “material factor which threatens the continued existence of the historic property.”

The existing tax exemption for residential and commercial historic properties is the City & County of Honolulu’s only systematic program to encourage the perpetuation of Oahu’s architectural heritage and historic legacy.

The City does not employ preservation planners, historic architects, historic landscape architects, architectural historians or other qualified preservation professionals on staff, either in its Real Property Assessment Division or in the Department of Planning & Permitting; Honolulu does not have regulations prohibiting demolition of historically significant properties or mandatory design guidelines to regulate alterations to historic structures; Honolulu does not have a local preservation commission or participate in the state’s certified local government program for a comprehensive preservation approach.

In short, the City has chosen a public policy that relies on a single incentive program to encourage the preservation of its heritage: property tax exemptions.  The current tax exemption was the subject of intense scrutiny, fierce debate, numerous public hearings and reviews, and ultimately changes to strengthen the clarity, conditions and enforcement of the preservation program.  Those changes were approved in June 2011 with rules promulgated in September 2011. The initial compliance period is still underway, with historic homeowners diligently purchasing and installing historic plaques, improving visual access, and upgrading structural conditions.

HHF recommends that the City retain its existing property tax exemption for historic properties dedicated for preservation; give the recent amendments and implementation a proving time to determine if they are effective; and table Bill 42 (2012).

The issue of the role of property tax exemptions for historic properties could be revisited if and when the City determines that it will develop a comprehensive program for historic preservation incentives, regulations, and professional management, with accompanying staffing and administrative support.

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Submitted by the Historic Hawaii Foundation