Since the eruption last Thursday of Kilauea volcano, located in the County and Island of Hawaii, at least 35 structures have burned down. Owners of this damaged property are eligible for property tax refunds.
Section 19-36 of the Hawaii County Code provides for the refund of property taxes to property owners in cases of certain disasters, including tidal waves, earthquakes, fire, landslides, volcanic eruptions, and floods. The refund is based on the value of the property lost multiplied by the percentage of the tax year remaining after the loss. Property owners have until the later of June 30 or 60 days after the disaster to apply. In the case of damage occurring last Thursday, this brings the deadline to July 2.
On Oahu and Kauai, property owners have until June 30 to apply for property tax refunds for property damaged or destroyed by the April 13 – 16 floods on those islands. An estimated 532 homes were damaged or destroyed by those floods. Under Section 5A-4.2 of its County Code, Kauai County provides the same relief and filing deadlines as does Hawaii County. Honolulu County, which comprises the island of Oahu, provides similar relief under Section 8-4.2 of its County Code but caps the refund amount at $25,000 per property.
Although not affected by these disasters, Maui County provides similar relief under its County Code, without the $25,000 cap applicable in Honolulu. The state’s remaining county, Kalawao, has no property tax or elected government. With more damage from Kilauea to come, more taxpayers are likely to qualify for tax relief from Hawaii County.
Can counties refunding tax on properties damaged in natural disasters make up the lost revenue without reducing services? Continue the discussion on Bloomberg Tax’s State Tax Group on LinkedIn.
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