Trending
The Maui News
Maui County Mayor Richard Bissen is proposing a bill that would offer tax exemptions for short-term rental owners who house residents displaced by the Aug. 8 wildfires.
Bissen submitted the bill to the Maui County Council on Tuesday that would amend a section of the County Code to immediately exempt short-term rentals from real property taxes when they are rented to displaced residents. Saying that "shared sacrifice is necessary at this time," Bissen said he also plans to propose to the council an increase in property taxes for all short-term vacation rentals, timeshare units and non-owner-occupied properties assessed over $1 million that do not participate in the program.
"Owners who help our disaster-impacted families by making their units available will receive a tax waiver," Bissen said in a news release Tuesday evening. "While those who choose not to can help by contributing more in taxes to make up for the loss of tax revenue."
The council plans to hear the bill on Dec. 5; if it is approved, it would take effect Jan. 1. Property taxes would be exempted from Feb. 20, 2024 to June 30, 2025. Short-term rental units, also known as transient vacation rental properties, are taxed at a rate of $11.85 per each $1,000 of its assessed value, which is the second highest of all tax rate classifications, according to the county.
For example, if an owner has a property assessed at $1 million classified as a transient vacation rental/short-term rental home, their taxes for this fiscal year are $11,850. If they lease their entire property and the lease begins Jan. 1 and ends Dec. 31, 2024, they will receive a $5,925 reduction in this year's taxes (second installment) and the full $11,850 in next year's taxes if they apply by Jan. 30. That is an estimated savings of $17,775, the county said.
Residents have been urging government officials to find more long-term housing for those displaced by the fire, with many still sheltering in hotels and having to move to new units or properties. Earlier this month, community members launched a fishing demonstration, camping out on Kaanapali Beach to raise awareness over the need for housing. Organizers called for the state and county to convert short-term rentals into long-term rentals.
Bissen said Tuesday that the proposed bill before the council would help increase housing inventory.
"This is one of many strategies we will use to address long-term housing needs," Bissen said. "My team and I continue to examine all options to bring feasible interim and long-term housing solutions forward. We still face significant water, wastewater and infrastructure challenges in West Maui -- conditions that were already difficult before the disaster which have made some options not immediately possible."
Maui County currently has 2,500 to 3,000 timeshare units, 12,000 to 14,000 non-owner-occupied homes and 12,000 to 14,000 short-term rentals, according to the county.