Kauai property tax increase on timeshares

[catwgirl]

I received this email today from TimeSharing Today:

TimeSharing Today

News Alert: Urgent info for Kauai timeshare owners

July 17, 2008

The following alert was sent by Belinda Breen, a concerned owner of a Kauai timeshare. While most readers are not directly affected, this issue should be of interest to all owners.

The County Council of Kauai is considering a proposed change to their property tax structure that will result in taxes on timeshares and rental properties increasing dramatically. Tens of thousands of Kauai timeshare owners will be affected by the proposal, which is apparently designed to reduce property taxes for Kauai residents at the expense of timeshare owners and vacationers.

Under the proposal, the property tax on buildings will increase from the current rate of $3.44 per $1,000 of value to $6.00 per $1,000. Kauai residents are protected from the brunt of this change since their homestead exemption will increase from $48,000 to $300,000 and taxes on land values will decrease.

In fact, Kauai residents’ taxes are expected to decrease by an average of 31%. Since the proposal is designed to be “revenue neutral,” timeshare owners will be making up the difference.

There is a public hearing on the proposal on July 30. Timeshare owners can express their concerns to the County Council by email:

Mel Rapozo, Council Vice Chair mfrapozo@kauai.gov

Tim Bynum, Councilmember tbynum@kauai.gov

Jay Furfaro, Councilmember jfurfaro@kauai.gov

Shaylene Iseri-Carvalho, Councilmember scarvalho@kauai.gov

Ronald Kouchi, Councilmember rkouchi@kauai.gov

JoAnn Yukimura, Councilmember jyukimura@kauai.gov



Here are links with articles about the situation:

http://starbulletin.com/2008/05/31/news/story08.html



http://www.honoluluadvertiser.com/apps/pbcs.dll/article?AID=/20080710/NEWS0102/807100357



To comment on this news alert, send an email to staff@tstoday.com Subject: Kauai

 

[rickandcindy23]

I also received this email from TST, and it is sad for Kauai timeshare owners because we are going to face the same unreasonable tax increases that Maui has passed onto timeshare owners. Our taxes at Gardens at West Maui more than doubled in two years.

We are unable to vote on these issues, and that is just wrong. I understand that Kauai needs to get some additional taxes, but the cost is going to hurt timeshare in general.

 

[Icarus]

We are unable to vote on these issues, and that is just wrong.

According to whom? You could always move here and then really screw them on your property taxes. Of course, in order to do that, you would have to sell your timeshare and buy a house.

Did you miss that the OP mentioned that the proposal is revenue neutral? Also, the proposed rate is much lower than the rate you are paying on Maui. I think it's $14 per thousand on Maui.

BTW, thanks for helping to widen the Mokulele and Haleakala Highways. We thank you for your contribution.

Already two replies and Sterling hasn't replied yet.

-David

 

[jacknsara]

... You could always move here and then really screw them on your property taxes. ... -David

Aloha,
That sounds like a win-win solution. What I great idea. Wish I could.
Jack

 

[Mimi]

Our response

July 18, 2008

This letter is written to communicate our dismay in the proposed doubling of property taxes to timeshares and rental properties in Kauai. We own two weeks of timeshare at Pono Kai located in Kapaa. Over the years, our family has spent a great deal of hard-earned money in your community. We have been patrons in your local restaurants and shops and have enjoyed participating in numerous tours and attractions with our children and grandchildren. We appreciate and respect the Hawaiian people and the culture of the island. We cherish the friendships we have made in Kauai.

We understand the County Council of Kauai is considering these increases to the property tax structures in timeshares and rental properties in order to dramatically reduce property taxes for Kauai residents by an average of 31%. Since the proposal is designed to be “revenue neutral,” timeshare consumers will be taxed unfairly to fill in the gap! As timeshare owners, we feel personally insulted and victimized. We are retired and on a fixed income. If this proposal is passed, we have decided we will travel alone, rather than bring extended family members to reduce our expenses. Also, if this unfair tax is passed, we will be forced to boycott restaurants and activities, and utilize the resort barbecue grills and/or cook in our units. We will explain to tour guides why we are no longer using their services. If we go to a restaurant, we will explain to wait staff why their tips are being slashed. We will encourage them to complain to their county council members if they are unhappy with this situation. We feel like we are being treated like second-class citizens on the island of Kauai instead of loyal tourists who return every year to contribute to your local businesses.

Please do not discriminate against timeshare owners by creating this unfair property tax. Our taxes should remain comparable to levels of other ratables.

We are counting on your Aloha spirit.

Sincerely,


Emailed to:
Mel Rapozo, Council Vice Chair mfrapozo@kauai.gov
Tim Bynum, Councilmember tbynum@kauai.gov
Jay Furfaro, Councilmember jfurfaro@kauai.gov
Shaylene Iseri-Carvalho, Councilmember scarvalho@kauai.gov
Ronald Kouchi, Councilmember rkouchi@kauai.gov
JoAnn Yukimura, Councilmember jyukimura@kauai.gov
Bryan Baptiste, Mayor bbaptiste@kauai.gov

 

[Icarus]

Your email to Bryan Baptiste won't get there unless you have a direct connection to the after life.

http://www.honoluluadvertiser.com/apps/pbcs.dll/article?AID=/20080622/BREAKING01/80622069

Good luck with that letter.

-David

 

[taffy19]

Already two replies and Sterling hasn't replied yet.

-David

Here is another one and a question too. I know that property taxes are kept low for the local people and I like the idea because the tourists made the real estate prices go through the roof but now the airline fares are getting so expensive, don't you agree that it is a bad time to raise RE taxes for tourists now?

Are they raising the hotel tax too or only for timeshare resorts? If that is the case, they are surely taking advantage of us because they know that we are stuck with the yearly maintenance fee so have to keep coming or try to exchange or rent it out.

Hotel guests have no yearly fees so can easily decide to go somewhere else but we can't nor do we have a vote in this matter either because we don't live there. It has to become more difficult to build and sell timeshare condos in Hawaii but there is too much built already and is starting to spoil the beautiful scenery for everyone. Maybe they do it for that reason so the timeshare developers will go somewhere else?

 

[Mimi]

Oops... I read the deceased mayor's name in one of the articles, but have resent it to the acting mayor.

 

[rickandcindy23]

David, I think it's wrong to charge increases in property taxes when we cannot vote because we are partial owners. I don't even want to say how many weeks we own on Kauai.

But if the money is going to improve the school district, I would vote YES, if I could vote! They need better school buildings on the islands, and I am happy to pay for that good cause. Teachers are probably underpaid, too. Teachers are under-appreciated everywhere, and the kids deserve to have good teachers, too.

Love the culture of Kauai and wish it wouldn't have to change.

 

[Kauai Kid]

Nothing is new here. It is the same story in Texas. Everyone has to have their taxes increased because the Governments always spend more than they bring in, sorta like my wife after we first got married.

Our personal finances require that we sell two of our weeks at Alii Kai this year and because of rising airfares, and a recession, we are only able to go to the Islands twice a year.

Since 90% of Hawaii's income depends on Hawaii it seems like the proposal is a loose-loose one.

Someone will eventually buy an Alii Kai condo outright and pay much less in property tax than the total for all 52 weeks from timeshare exchangers.

It is sorta like $4 gas on the mainland. Kind of a tipping point.

Whatever happened to Aloha?

Sadly, Sterling

 

[Icarus]

David, I think it's wrong to charge increases in property taxes when we cannot vote because we are partial owners. I don't even want to say how many weeks we own on Kauai.

How different is this than higher tax rates for commercial and industrial properties in your home town? Business operators don't get representation on their tax rates either, unless they also happen to live and vote in that community.

I'm not saying that this is right or wrong. Just that you can't have it both ways. If you don't vote or fight for parity on real estate tax rates for non-residential properties in your own community where you do get a vote, then it seems hypocritical to me to oppose them on Kauai because your rates are going up. A timeshare property is not a residential property. It's a resort property.

For better or worse, Maui and now Kauai have decided to shift some of the property tax burden to the resort industry, which includes timeshare owners.

The only thing your associations will be able to fight are the valuations that the county assessors use. If you find that they are using bogus (retail) values, your associations should appeal them.

-David

 

[taffy19]

David, did the hotel tax go up too? If so, I am OK with it but if not, I feel that they got us over a barrel. You were smart to sell yours in time before the prices headed south and taxes are increasing. I would think that Hawaii needs the tourist industry so they can't tax us to death.

Yes, I am glad we paid towards better roads as they were badly needed on the island of Maui. We noticed that traffic has improved as we didn't have the traffic jams this last March as we have experienced in other years.

 

[Icarus]

David, did the hotel tax go up too? If so, I am OK with it but if not, I feel that they got us over a barrel.

Yes, they did. This is from the Star Bulletin link in the OP:

For example, lands used for farming, fuel production or conservation lands without any buildings would be in one classification, while any properties that pay transient accommodations tax, such as hotels, bed-and-breakfasts and vacation rentals, would be lumped in another classification.

Those in the resort classification would experience the largest tax increase, as they bear the brunt of the new system.

You were smart to sell yours in time before the prices headed south and taxes are increasing.

My situation was a little different from most people. I started by visiting Kauai, then bought a KBC from the developer before I knew about TUG, then on the first occupancy, we decided to move to Kauai and bought a house there. So I didn't really need to own a timeshare in Hawaii. I kept it way too long. In the interim there were special assessments because of the flood damage to the storm drain and a special project to add a co-generation facility to heat the pool. It wasn't until I got divorced that I decided to sell it. I could be a case study in how unplanned life events might change the way you think about owning a timeshare, I guess.

Yes, I am glad we paid towards better roads as they were badly needed on the island of Maui. We noticed that traffic has improved as we didn't have the traffic jams this last March as we have experienced in other years.

I don't know when you were here last, but the Mokulele Highway (Kahalui to Kihei) is completely finished now. It took a while, but now it's 4 lanes with a seemless connection to the Pililani Highway in Kihei. That one has really helped.

The widening of the Haleakala Hwy to a 4 lane divided road from the Hana Hwy to the Pukalani cutoff looks to be almost done, but who knows how much longer the finishing touches will take. Part of the project included three new traffic lights on the Haleakala Highway. Only one is currently operational at the intersection before Makawao Ave on the way up. That one may have been a separate project for all I know. The other two are definitely part of the widening project. One is at Haliamale and the other is at a cane road intersection.

Both of these are state highways, so the majority of the funding probably comes from the state. A small portion might be funded by the county.

At some point they will start on the Lahaina bypass, but that's a 3 phase project that I'm sure will take a while. I really want the new road from upcountry to Kihei, which is also on the books and some preliminary paper work has been done, but it hasn't been started yet.

I agree they do have you over a barrel, but there's not much you can do about it. Anytime a larger group passes a tax on a smaller group (e.g., taxes on liquor, cigarettes, etc) it's basically the same thing.

-David

 

[taffy19]

We were there just recently (Mar/Apr) and I tried to call you. We finally did talk as you called me back but we didn't meet up this time.

I don't feel so bad now about the tax increase if the hotels are paying it too but I still feel that they are doing this at the wrong time now airlines fares are getting so expensive too. You need the tourists or your economy will suffer and locals will get out of work. Are they not thinking of that? If we need to cut back because of high fuel prices, people will drive or fly less to go on vacations. Period.

 

[Icarus]

You need the tourists or your economy will suffer and locals will get out of work. Are they not thinking of that? If we need to cut back because of high fuel prices, people will drive or fly less to go on vacations. Period.

I'm sure they are considering all of it. Dollar wise, the increase won't be that bad per unit, plus it's tax deductible under the right circumstances, depending on how your association bills you and the form of ownership, I guess.

On Kauai, any resident that owns a vacation rental will also have to pay much higher real estate taxes.

-David

 

[rickandcindy23]

I hope the taxes go to improve the lives of the children. That would be a great use of the money.

 

[Twinkstarr]

This is not surprising, we looked at fractional/whole ownership condos up in Northern MI a few years ago and the property tax is much higher for a vacation home than a residential home.

 

[Jim Bryan]

As much as I love Hawaii, I can see the writing on the wall. People not going to Hawaii won't suffer (much). But the Hawaiian economy will suffer because they have stopped. Several obstacles in the way of a Vacation to Hawaii now. Some locals may be for this (Yes, I can see both sides, and do have friends that would like tourism controlled) but it will impact everyone eventually.

 

[LisaRex]

Legislators love to stick it to the tourists. In Phoenix, the taxes on my rental car were 2/3 of the rental price (rental price: $150; taxes & fees: $100)! Elsewhere I've seen sales taxes, bed taxes, hotel taxes, environmental impact taxes and mandatory resort fees added to the cost of my hotel room.

Timeshares get a bum rap. We are much aligned by people as being cheapskates. Which is ridiculous because dollar for dollar I've spent more on activities, restaurants and eating out as a timeshare owner than I ever spent as a non-timeshare owner.

I am glad that my money is having a positive impact on Maui, however. I'm impressed with the improvements to R. 30 through the West Maui mountains. Guard rails, yellow lines, blasting out the sides of mountains on hairpin turns so you don't have to veer over the middle in order to negotiate the turn...all these are great improvements. So if the extra $100 or so that I'm paying on property taxes for my timeshare goes to good use, I won't complain too loudly. Hell, I've spent triple that on tips this week. (I'm in Maui as I type.)

 

[Icarus]

In Phoenix and many other places, those rental car taxes are paying for their new stadium so that local residents don't have to pay for it. Phoenix has a beautiful stadium. Have you seen the Modern Marvels episode on it? The field is on rollers and moves out of the stadium so they can maintain the natural grass field in the sunlight. Anyway, it's just another example of shifting the tax burden to a constituency that has no vote and no representation.

In Maui and with the proposal on Kauai, the tax rate adjustments are being used to lower the real estate taxes for residents while shifting a higher burden to the resort industry. The theory is that it helps locals keep their properties.

-David