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Tax bill will help longtime Maui families keep land

Some lineal descendants owe thousands of dollars in property taxes as values rise

Since 2017, property taxes for the Makena land that Edward Chang’s family has lived on for more than a century have gone from the $4,000 range to nearly $14,000.

“I have had to ask my children for help,” said Chang, who said his family first acquired the property in 1883.

With land in highly sought areas near the beachfront and rural areas, lineal descendants of properties owned for generations currently face thousands of dollars in property taxes, their rates skyrocketing due to land speculators as well as high-end homes and new developments being built around them, testifiers at the Maui County Council’s Budget, Finance and Economic Development Committee meeting said Wednesday afternoon.

The council is considering a bill that would help longtime local families who have owned property for generations from being taxed out of ownership. The “Aina Kupuna Lands” bill introduced by Committee Chairwoman Keani Rawlins-Fernandez will allow those who qualify to instead pay the minimum tax, which is currently $350 a year. Real property owners will also need to dedicate their land as “aina kupuna.”

The nine-member committee recommended the bill for approval Wednesday, with Council Member Tasha Kama excused. It now heads to the full Maui County Council for two votes.

“Aina kupuna” is defined as those portions of real property that are owned in whole or in part by a lineal descendant of the person who held title to the property as of June 30, 1940, according to the amended bill.

It does not include real property owned by a corporation where the stock is sold to or owned by the general public.

The land dedicated to be “aina kupuna” must be limited to a parcel not used for commercial purposes and the parcel dedicated must not be conveyed to a non-lineal descendant during the tax exemption period, according to the bill. However, commercial agriculture on the land is allowed.

Leina’ala Kuloloio Vedder said she supported the bill, but also is seeking help for those families who may not qualify under certain criteria, especially those conducting commercial businesses on the land.

She said some families have had to conduct short-term rentals on the properties or weddings “just to provide income to pay for the taxes.”

One example is the Luuwai family in Makena, which has a short-term rental on their property. Council Member Tamara Paltin said the income is needed, as half of the family did not want the burden of the high property taxes years ago, while another part of the family wanted to keep the property. One portion of the family had to take out a mortgage to buy out the other half of the property, and the short-term rental helps pay for those bills, Paltin said.

Committee members voted to amend the bill to allow at least the Luuwai family to continue running the short-term rental.

Tom Cook said the bill can help local families to keep their lands. He added that local residents believe they are stewards of the land and it is more than just property, “we care for it.”

“It’s keeping land in families for generations, not only Hawaiian families, but of our other local families who have owned property and not sold it and are not speculators,” Cook said.

Council Member Shane Sinenci suggested amending the bill to allow ownership that traces back to June 30, 1940, after listening to testifiers who said they wouldn’t qualify, as the land has not been in their family since June 30, 1931, which was the requirement in the original version of the bill.

An application to qualify for the tax must be filed with the county by Dec. 31 of any calendar year, with notice on the qualification on or before March 1. If approved, the minimum tax takes effect the succeeding tax year, which in this case would be July 1, 2022, confirmed Marcy Martin, Maui County’s real property tax administrator.

The applicant must apply for a renewal for additional periods of no less than 10 years subject to cancellation in each ninth year by the owner, according to the bill.

* Melissa Tanji can be reached at mtanji@mauinews.com.

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