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.
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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 146 (2025) — A BILL ON THE PRINCIPAL HOME EXEMPTION’S APPLICATION DEADLINES
Aloha Chair Lee, Vice Chair Rawlins-Fernandez and other members of the Committee,
The Grassroot Institute of Hawaii supports Bill 146 (2025), which would amend how home exemption applications are processed.
Currently, a Maui homeowner who files for a home exemption cannot receive the exemption until the next tax year. For example, a homeowner who files for a home exemption before Dec. 31, 2025 will not receive the exemption or be moved into the owner-occupied tax class until the tax year beginning July 1, 2026.
This creates a burden for folks who purchase homes that had not been previously owner-occupied. If a Maui resident were to purchase a home valued at $1 million that was classified as a short-term rental, they would pay an extra $10,000 in property taxes compared to what they would pay if the home was classified as owner-occupied.[1]
Bill 146 (2025) would allow exemptions to go into effect for the tax year in which the application was filed, so if a Maui homeowner filed for a home exemption after Dec. 31, 2025, they could receive at least half of the tax benefits of the exemption for the tax year that began July 1, 2025.
The proposed amendment to this bill would limit the situations in which this new filing system would apply. Specifically, it would allow for this amended application process in situations where someone purchased a workforce housing unit or a property that had been classified as a short-term rental within the past five years.
Grassroot prefers the current draft, since it allows all homeowners — regardless of what sort of property they are purchasing — to receive tax relief.
Thank you for the opportunity to testify.
Jonathan Helton
Policy Analyst
Grassroot Institute of Hawaii
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[1] “Real Property Tax Rates for Tax Year July 1, 2025 to June 30, 2026,” Real Property Assessment Division, Honolulu Department of Budget and Fiscal Services, July 2025.
