# Oahu taxes



## alohakevin (Jul 19, 2013)

Food for thought. Is timeshare on Maui its own tax class or is it hotel and resort?


Honolulu City Council Proposes Ordinance to Create New Property Tax Classification for Timeshare
July 17, 2013
Issue Brief
Currently, timeshare property in Honolulu falls under the classification of “hotel and resort” real property. This means that timeshares are taxed at the same rate as hotels and resorts. The proposed ordinance would create a new class of real property specifically for timeshares. This can only mean one thing – Oahu-based timeshare owners are one step away from paying higher property taxes!
A more detailed legislative description will be forthcoming as well as information on how owners and HOAs can participate in the process. Please visit www.arda-roc.org for further details.**
Impact
Higher property taxes would harm timeshare owners who own on Oahu and Oahu-based HOAs in many ways. First, Hawaii property tax assessments are already among the highest of any jurisdiction in the United States. Second, timeshare owners, when compared to other property tax payers, would bear a disproportionate tax burden. Third, owners would see an even more substantial increase in annual maintenance fees since maintenance fees would not only include the increase in property taxes but also a higher overall General Excise Tax and Transient Accommodations Tax assessment.
Position/Call to Action
The proposed ordinance is scheduled to be heard by the Hawaii City Council Budget Committee today, Wednesday, July 17, 2013.*ARDA and ARDA-ROC, working in conjunction with ARDA-Hawaii, are notifying impacted owners and HOAs alerting them to the measure immediately and are vigorously working to prevent the ordinance from passing.


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## PearlCity (Jul 19, 2013)

alohakevin said:


> Food for thought. Is timeshare on Maui its own tax class or is it hotel and resort?
> 
> 
> Honolulu City Council Proposes Ordinance to Create New Property Tax Classification for Timeshare
> ...




I saw that in the honolulu advertiser last week.. it bites... But if Oahu.passed this, I'm sure other islands will follow suit...


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## jarta (Jul 19, 2013)

> Is timeshare on Maui its own tax class or is it hotel and resort?   ...   Honolulu City Council Proposes Ordinance to Create New Property Tax Classification for Timeshare



For property taxation Maui County has a classification system.  Timeshares are in one property tax class; hotels are in another class.  For other types of taxes, I have not heard of differences.

You seemed to know this last year when you started a thread that Maui was at it again - proposing raising the property tax percentage for timeshares from 15% to 16.5%.   http://www.tugbbs.com/forums/showthread.php?t=168468

Government is given great discretion in setting the levels of taxation.  The test under the Equal Protection Clause is whether the classification system is arbitrary and capricious.  

The classification system chosen by any government receives a presumption of validity and the person claiming to be damaged must prove the system is arbitrary and capricious. If a court finds there is any conceivable rational reason for the differentiation in tax treatment, the classification will be upheld.  So, it is very rare for a court to step in and undo what the elected officials have set up.

The subject matter is certainly relevant to the SVO Maui and Kauai properties.  But, why not start off this thread about a proposal by Oahu with an admission that Maui County already does this and you have complained about Maui County's system for years?   Salty


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## DeniseM (Jul 19, 2013)

Hi Kevin - Thank you so much for your vigilance on this issue over the years!

Those of us who are _actually owners_ in Hawaii, are very concerned about taxes.

In other words - *Complain all you want!* 

Thank you!


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## LisaRex (Jul 19, 2013)

Maui has been sticking it to timeshare owners for years, charging TS owners at a rate that is ~700x what residents pay, after you take out the $250,000 homeowner exemption.  Now it looks like Oahu is going to follow suit.  

Aloha!

P.S. I think that this should be moved to the Hawaii section.  After all, SVO doesn't have any presence on Oahu.  This will definitely impact Marriott and Hilton TS owners, among others.


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## BocaBoy (Jul 20, 2013)

PearlCity said:


> I saw that in the honolulu advertiser last week.. it bites... But *if Oahu.passed this, I'm sure other islands will follow suit*...



Maui already has, and in a big way.  My most recent tax bill was over $280 per week for each of our 2BR units in the new towers at Marriott's Maui Ocean Club.


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## Luanne (Jul 20, 2013)

BocaBoy said:


> Maui already has, and in a big way.  My most recent tax bill was over $280 per week for each of our 2BR units in the new towers at Marriott's Maui Ocean Club.



Are you getting a separate property tax bill for your Maui timeshares?  Ours has always been included in our maintenance fees.


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## PearlCity (Jul 21, 2013)

BocaBoy said:


> Maui already has, and in a big way.  My most recent tax bill was over $280 per week for each of our 2BR units in the new towers at Marriott's Maui Ocean Club.



I know.. that's a crazy tax rate!!


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## BocaBoy (Jul 21, 2013)

Luanne said:


> Are you getting a separate property tax bill for your Maui timeshares?  Ours has always been included in our maintenance fees.


It is included in the maintenance fees, but Marriott breaks it out as a separate line item on the bill for tax deduction purposes.


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## Luanne (Jul 21, 2013)

BocaBoy said:


> It is included in the maintenance fees, but Marriott breaks it out as a separate line item on the bill for tax deduction purposes.



Thanks.  I get the amount of our taxes on the Maui Hill website.


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## Tamaradarann (Jul 22, 2013)

*Hawaii Tax Assessments and Rates?*



alohakevin said:


> Food for thought. Is timeshare on Maui its own tax class or is it hotel and resort?
> 
> 
> Honolulu City Council Proposes Ordinance to Create New Property Tax Classification for Timeshare
> ...



I understand the importance of keeping the Timeshare Owners Tax rates low.  Since timeshare ownership does not create public school costs, as whole ownership does, it certainly shouldn't have to pay for those costs as property taxes in many jurisdictions do.  Therefore, it that sense they should be taxed more like Hotels and Resorts.  However, I don't believe that public schools are are funded from the property taxes in Hawaii.   

The Transient Accommodations Tax does annoy some owners and exchangers who don't have to pay that tax when they stay in other states.  It that sense I believe that as owners or exchangers who own property or are exchanging property and shouldn't be subject to a Transient Accommodations Tax to use property that you own.  Would re-classification of timeshares bring an end to the Transient Accommodation Tax for timeshares?

Finally, when discussing property taxes you can't discuss tax assessments separately from tax rates.  While Hawaii might have a high tax assessment, their tax rates must be one of the lowest in the country.  We were looking at purchasing a 650K condo in Waikiki where the property taxes were $2000 per year.  Our 300K House on Long island, in a low tax area of Long Island, has property taxes of $7000 per year.  

I view of the above, if the proposal is for timeshare owners to pay their share of property taxes and not pay the Transient Accommodations Tax and school taxes which is the same as whole owners in Hawaii, it may not be a bad deal at all for timeshare owners and exchangers.


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## LisaRex (Jul 22, 2013)

Maui TAX RATES as of 7/1/13:

A. Residential $5.75
B. Apartment $6.40
C. Commercial $7.05
D. Industrial $7.30
E. Agricultural $6.05
F. Conservation $6.25
G. Hotel & Resort $9.40
H. Time Share $15.55
I.  Homeowner $2.87
J. Commercialized Residential $4.60

Maui TAX RATES as of 7/1/12
A. Residential $5.75
B. Apartment $6.20
C. Commercial $6.90
D. Industrial $7.10
E. Agricultural $6.00
F. Conservation $6.20
G. Hotel & Resort $9.15
H. Time Share $15.50
I. Homeowner $2.75
J. Commercialized Residential $4.50

Maui TAX RATES as of 7/1/11
A. Residential $5.55
B. Apartment $5.50
C. Commercial $6.25
D. Industrial $7.00
E. Agricultural $5.80
F. Conservation $5.60
G. Hotel & Resort $9.00
H. Time Share $15.00
I. Homeowner $2.50
J. Commercialized Residential $4.20


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## Tamaradarann (Jul 22, 2013)

*The differences are Unreal*



LisaRex said:


> Maui TAX RATES as of 7/1/13:
> 
> A. Residential $5.75
> B. Apartment $6.40
> ...



The differences in tax rates on Maui are Unreal.  They are really screwing the timeshare owners.  The Hotel and Resort rates are also no bargain.  That hotel and resort rates are reflected in high hotel room rates to which the hotel tax percentage is added on top.  Furthemore, they are rewarding the homeowner with a very low rate who probably uses the roads, emergency services, schools, and other public facilities more than anyone else since they live there year round.  T I wish they would reward the homeowner on Long Island so I would pay about $1,000 per year instead of $7,000 per year.
Timeshare owners are owners of a portion of the property and should pay their share of the residential or commercialized residential rate.


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## DeniseM (Jul 22, 2013)

The Maui County Board of Supervisors has openly stated that they prefer hotel guests over timeshare owners.  They believe that hotel guests spend more money on vacation, and therefore contribute more to the economy...


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## PearlCity (Jul 23, 2013)

I just wanted to clarify that schools in Hawaii are paid for by state taxes not property taxes. But I agree the tax rate on timeshare owners are high.


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## jestme (Jul 23, 2013)

DeniseM said:


> The Maui County Board of Supervisors has openly stated that they prefer hotel guests over timeshare owners.  They believe that hotel guests spend more money on vacation, and therefore contribute more to the economy...



Although they may be right that timeshare owners might spend less on vacation, due to cooking for themselves, eating in, etc., when the hotel room capacity was running at 50% or less a few years ago, the timeshare resorts were still running at 95-99% full. They are pretty well a guaranteed draw, year after year, regardless of the economy. Also, there are number of timeshare owners that do not eat in all the time. 
We rarely eat in, except maybe coffee and muffin in the morning, and we have never cooked an entire meal from scratch. My wife's first comment when we bought was "If you think I'm going on vacation and continue to cook, clean, make beds, go to the grocery store, plan meals, etc. then you must have a different view of a vacation than I do." 
The political view of this taxation is that we cannot vote in any election, so we are easy targets for tax increases. ARDA is useless in fighting these situations, the governments don't care. When this came up before, I sent a letter to the State telling them that in today's world, they were competing for travel dollars with everywhere else in the world. Long flights, usually with a connection through a large hub, 40-50 year old high priced hotel / resort properties, with few facilities are trying to compete with "all inclusive", one price for everything, brand new resorts, within a 2-4 hour direct flight from most places, at 40% of the total cost elsewhere in the world. 
I also pointed out that timeshares were the only real travel industry construction that was being built, and that if they couldn't be sold for a profit, (because they were to be to expensive to carry afterwards), that the large companies (Disney, Hilton, Marriott) wouldn't build there any more.
I love Hawaii, but the glow of it is starting to wear a bit, mostly because of the long flight times, the feeling of value for the cosgt, and there really isn't anything new at all to see. Adding more cost through taxation wont help it's world wide competitiveness at all.


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## LisaRex (Jul 24, 2013)

Back in 2005, Maui was beginning to feel growing pains from rising tourism.  Traffic was becoming a huge problem, parks were getting crowded, and their budget was being stretched.  But rather than conclude that ALL people, including (gasp!) themselves, shared the blame, timeshare owners were singled out.  In short, they disliked "our kind."  According to them, we showed up, cooked in our pre-paid villas, drank their precious water, drove on their roads, snorkeled in their ocean, used their public parks, and then left without contributing our "fair share."  

"I don't see it being a need in our county to have time share," said G. Riki Hokama, Maui County Council chairman. "That's not the visitor I want here." 

http://www.bizjournals.com/pacific/stories/2006/07/10/story1.html

So, Maui council came up with the great idea to create a separate classification for timeshare owners, so we'd be forced to pay our fair share.  To bolster their case, they commissioned a study to prove what they'd already concluded -- that we were tourist pigs.  To give you an indication of their prejudice against us, look at the questions they wanted the study to answer (page 6): 

Representative Issues and Concerns
 Are timeshares paying “fair share” of taxes?
 Are timeshare conversions substantial contributor to traffic congestion?
 Are timeshares disproportionately using public resources (e.g. public parks)?
 Are timeshare conversions causing significant loss of employment and economic decline?
 Are timeshares attracting a less desirable market segment?

www.co.maui.hi.us/​DocumentView.asp?DID=3202 

Now anyone with a lick of common sense would know that, aside from spending less in restaurants, timeshare owners are no different than hotel, condo, and B&B tourists.  And, lo and behold, their independent study concluded just that.  Oh, it must have really aggravated them to see that report!  In fact, their own findings indicated that TS owners actually spent more on activities such as cruises and shows, that we spent less time in public parks, and that overall, we were wealthier than the average hotel tourist. 

So they backed off, right?  Of course not!  _Even after their own commissioned study concluded the opposite of what they'd pre-concluded_, in true politician style, they stayed on their original course and and stuck it to timeshare owners.  They created a new classification for timeshares, and they singled us out to bear the biggest burden of anyone on the island.  And they've continue to stick it to us, by raising the rate just about every single year. 

To add a little vinegar to the pudding, a few weeks ago Maui council appealed to the public to hear how real estate taxes were impacting them:

http://www.mauinews.com/page/conten...o-know-how-real-property-tax-affects-you.html

"Though Maui County's real property tax rates are among the nation's lowest, we still need to work on ensuring the system is equitable and protects our residents." 

It must be nice to have taxation with representation.


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## dannybaker (Jul 25, 2013)

*Another great reason NOT to own in Hawaii*

Wow, I am never amazed by the greed of communities. We do not own in Hawaii and will never own in Hawaii. I have several choices when I own a timeshare, one of my largest is annual maintenance fee and return on investment. I love TUG and the education they have provided me. We will have spent 9 weeks this year in Hawaii. (Five weeks with Marriott, two weeks with Hilton, two weeks Wyndham) my average cost per hawaii week is around $500. If the cost keep going up for owners their choice is clear; pay the price or sell. I understand your disgust with the unfair taxation on time share owners. I just don't believe the tax payers of Hawaii care if the Rich timeshare owners pay a little more. Someone needs to pay and as long as its not the citizens who vote all is good. 
It is so expensive to visit Hawaii, airfare is crazy high and going up, food is ridiculous, gas is the highest in the us, timeshare maintenance fees are the highest, lets not even talk rental car add on prices, and original ownership cost is super high. Bottom line is we love Hawaii, but this is one more reason we will never own in Hawaii.


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## jade2g (Jul 27, 2013)

There are tax inequities in every state of the US, and in many other countries; and the Hawaii timeshare tax difference is not the worst, by far.  Hawaii politicians look at the fact that rich companies, and people (e.g. the Donald) have built many timeshare buildings in Hawaii, and feel they can tax the "wealthy" to help out their constituents; which serves to keep the politicians in office (power).

As an owner in Hawaii, I can say the reason I purchased in Hawaii had nothing to do with the taxes.  The reason I purchased in Hawaii is I was able to find the best cost for what I see as the most flexibility.  Because many, if not all, Hawaii timeshares are for any week of the year, and not just one particular week, and every week is a Red week, it is easier to exchange them.  Plus, because of the premium still associated with Hawaii, it seems easier, at least to me, to be able to get an upgrade outside of Hawaii.

Also, I know of a number of owners in the same place that I own who have found it quite easy to rent out their week(s) and more than cover their annual maintenance fees with the amounts they collect in rent (especially if your timeshare gives a discount for cash payments of the annual maintenance fee).  This is also borne out by the earlier post that showed Hawaii timeshares typically have a higher occupancy rate even in the "down" times.

Aloha


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## amy241 (Mar 6, 2017)

alohakevin said:


> Food for thought. Is timeshare on Maui its own tax class or is it hotel and resort?
> 
> 
> Honolulu City Council Proposes Ordinance to Create New Property Tax Classification for Timeshare
> ...




I know this is an older thread dating back to 2013 but can someone tell me if this special tax classification status for timeshares was ever enacted in Oahu? We are considering buying a timeshare there and I would like to know this before we buy. I know it was enacted in Maui.


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## amy241 (Mar 6, 2017)

It appears I found a 2017 answer at least: https://www.realpropertyhonolulu.com/media/1459/16_rates.pdf

Thus far, only Maui has enacted the less favorable timeshare tax classification at a rate higher than resorts and hotels. The other islands do not have a special tax classification for timeshares at this point.


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