The following testimony was submitted by the Grassroot Institute of Hawaii for consideration by the Maui County Council Special Committee on Real Property Tax Reform on Nov. 13, 2025.
_____________
Nov. 13, 2025, 9 a.m.
Kalana O Maui Building
To: Maui County Council, Special Committee on Real Property Tax Reform
Alice Lee, Chair
Keani Rawlins-Fernandez, Vice Chair
From: Grassroot Institute of Hawaii
Jonathan Helton, Policy Analyst
Re: Bill 171 (2025) — A BILL EXTENDING MAUl WILDFIRES REAL PROPERTY TAX RELIEF
Aloha Chair Lee, Vice Chair Rawlins-Fernandez and other members of the Committee,
The Grassroot Institute of Hawaii supports Bill 171 (2025), which would extend until July 1, 2028, property tax waivers for certain properties damaged or destroyed in the Aug. 8, 2023, wildfires, and make other changes.
After the wildfires, county lawmakers exempted properties destroyed in the wildfires and those that were within a red or yellow reentry zone as of Jan. 1, 2024; however, the waivers are slated to expire on July 1, 2026.
Further extending these waivers would help Lahaina homeowners and businesses afford to rebuild. If the waivers expire next year, many local property owners will face the prospect of paying taxes on land they cannot easily — and in some cases, legally — rebuild on.
Bill 171 (2025) would add some caveats to the existing waivers. Not all properties would be eligible; only those that are located within a Special Management Area or a historic zoning district or that abut the shoreline and that have not been rebuilt or do not have access to public infrastructure.
Further, Bill 171 (2025) would specify conditions under which an owner would have to start paying property taxes, such as the property being sold, a certificate of occupancy being issued for the property or the property being used or advertised as a transient accommodation.
Land values are a big reason these exemptions are so critical. For many Lahaina parcels, close to 70% of their pre-fire taxable value was in the land. Were that land to be taxed before they can rebuild, many owners would be paying almost their entire pre-fire tax bills on properties they could not functionally use.
For example, Fleetwood’s on Front Street paid $54,122.03 in taxes in fiscal 2023. Of the property’s $8,780,500 assessed value, $6,018,300 — 68.5% of its value — was in the land.[1] The owner has been unable to rebuild the property to date and will face a $37,000 bill if the waiver expires in 2026 and assessments remain at pre-fire levels.
Extending these waivers would come at a relatively small cost to the county. The Maui Department of Finance has estimated the current exemptions for destroyed properties and those in the yellow and red reentry zones cost the County about $21.2 million — equivalent to 3.2% of the roughly $660 million the county is expected to collect in fiscal 2026.[2]
Grassroot is concerned that some of the conditions that Bill 171 (2025) proposes to add to the waiver could deprive Lahaina residents of critical tax relief. Almost all properties mauka of Honoapiʻilani Highway, for example, would not be eligible for tax relief because they fall outside of the SMA, county historic district or shoreline boundaries.
Likewise, a property that receives a certificate of occupancy or a final inspection at any time during the year should not have to face a tax bill for the entire year. For example, a certificate of occupancy or final inspection granted in May 2027, near the end of fiscal 2027, would mean the property owner would have to pay taxes for the full fiscal tax year.
Grassroot suggests amending these sections to extend relief to those who have not yet rebuilt or have been so far unable to rebuild.
Thank you for the opportunity to testify.
Jonathan Helton
Policy Analyst
Grassroot Institute of Hawaii
_____________
[1] Parcel no. 460090070000, County of Maui Tax Assessor’s Office, accessed Sept. 17, 2025.
[2] “Selected Real Property Statistics for Budget Consideration Fiscal Year 2025-2026,” Maui Department of Finance, Real Property Assessment Division, p. 33; and “County of Maui Real Property Tax Valuation for Fiscal Year 2025 – 2026,” Real Property Assessment Division, Honolulu Department of Budget and Fiscal Services, July 2025.
