Lower-income homeowners must apply annually for tax credit

Kokua Line: Lower-income homeowners must apply annually for tax credit
By Christine Donnelly, Star-Advertiser, 9/17/19

Question: You had something about a property tax credit for low-income homeowners. I don’t recall the date or details. Must my mom file for this every year, or is it automatic? She has been ill much of the last year, and I am trying to help her with various paperwork.

Answer: Yes, this form must be submitted every year. The deadline is Sept. 30.

You are referring to Oahu’s Real Property Tax Credit for Homeowners, which applies a credit to the following year’s property taxes for lower-income homeowners whose property taxes exceed 3% of their annual income. To be eligible:

>> The combined annual income of all titleholders on the property cannot exceed $60,000.

>> None of the titleholders can own other property, in Hawaii or elsewhere.

>> The property must have a home exemption, which signifies that it is occupied by the owner.

You can download the form at 808ne.ws/propcred or pick up a hard copy at any satellite city hall or at the city’s Treasury Division (530 S. King St., Room 115) or Tax Relief Section (715 S. King St., Room 505).

Instructions for submitting the application and supporting documents are on the form. Applications postmarked on the due date will be accepted, according to the city Department of Budget and Fiscal Services.

The value of the credit is derived by subtracting the 3% figure from the total property tax owed. So, according to the city’s example, an applicant with total annual titleholder income of $25,000 and a property tax bill of $2,500 could expect a credit of $1,750 applied to the following year’s property taxes. This is because 3% of $25,000 is $750, which is subtracted from the property tax bill of $2,500 to derive the credit amount.

We explain this because we’ve heard from other readers who mistakenly expected the tax credit to equal 3% of their income; the credit varies depending on the applicant’s income and the cost of their property taxes.

You can find more information online at 808ne.ws/info, or call the city’s Real Property Tax Relief Office at 768-3205.

We’ll also note that, unlike this credit, a home exemption, once granted, is automatically applied year after year. Your mom doesn’t have to reapply for that; if she has previously qualified for the low-income property tax credit, the home exemption must already be in place.

Q: Can this get her property taxes down to zero?

A: No, the city says the amount of property taxes owed after applying the tax credit can’t be less than the minimum required property tax, which is $300.