Frequently Asked Questions
What is the historic commercial property tax exemption?
In 2004, Honolulu City Council approved a bill that enables a property tax rebate of 50% on designated historic sites that are used for commercial purposes, except for hotel, resort or industrial uses (Honolulu Municipal Code Sec. 8-10.30).
What is the timeframe for applying for the historic tax exemption?
Petitions for the exemption need to be filed with the Director of Budget and Fiscal Services Department by September 1 of any calendar year. The Director approves or denies the petitions by December 15 of the same year for an effective date of July 15 of the immediately following tax year.
What are the benefits of participating in the program?
After acceptance into the program, 50 percent of the value of the real property designated as historic is exempt from real property taxes.
The program was approved to provide an incentive for property owners to maintain and preserve their historic buildings. The intention is to use the property tax savings to supplement capital maintenance and improvements to the buildings. For the property owner, the benefit is a tax savings and program for reinvesting in the capital needs of the buildings. For the community, the benefit is revitalization of older commercial areas, keeping them vibrant and active, and preservation of historic buildings. For the City and County, the benefit is active commercial districts that generate opportunities for employment, services and economic development (such as from tenant activity or construction work).
Which properties are eligible for the historic tax exemption?
Properties in the City and County of Honolulu that are listed on the National or Hawai‘i State Register of Historic Places are eligible. Contributing structures in a designated historic district are eligible if they have an individual Tax Map Key number. Contributing buildings are those that are at least 50 years old and that retain the historic features that are significant to the era in which they were built. The City maintains a list of contributing structures in the Chinatown and Merchant Street historic districts for easy reference. Non-contributing structures located in a historic district are not eligible.
What are the conditions of the historic tax exemption?
1.The property owner determines a plan to maintain the historically-significant features of the building following established preservation standards. The preservation maintenance plan is reviewed by the Department of Planning and Permitting, the State Historic Preservation Division and a preservation non-profit organization for concurrence before being sent to the City’s Department of Budget and Fiscal Management for final decision. The City determines whether to grant or deny the tax exemption. 2.The property owners and the City sign a contractually-binding agreement that obligates the property owners to follow the preservation maintenance plan for a period of ten years. A short form of the agreement is recorded against the property.
What are the consequences of non-compliance with the conditions of the tax exemption?
If the monitor determines that the property owner has failed to comply with the terms of the maintenance agreement, the owner is given the opportunity to meet the conditions and make corrections. If that is unsuccessful, the Director of Budget and Fiscal Services Department may cancel the exemption retroactive to the initial date. The property owner is required to pay back the taxes that were exempted, along with 12% annual interest.
What is the term of the property tax exemption?
The initial tax exemption period is ten years. It is automatically renewable for an unlimited number of additional ten year periods.
The maintenance agreement is determined on a case-by-case basis for each property in the program and is tailored to the individual building. The intention is to determine an appropriate maintenance plan that will preserve the historic building and keep it in active use, while being flexible enough to allow for changing circumstances. The foundation of the preservation maintenance plan is a description of the historically-significant elements of the building, the appropriate maintenance or repair treatment, and a timeline for the treatments. The maintenance agreement includes a commitment to carry out maintenance and any capital improvements according to the Secretary of the Interior’s Standards for Historic Properties, which is the industry standard for rehabilitation, restoration and preservation work. The maintenance agreement will also specify that the public will be provided reasonable visual access to the historic property.
Several architectural firms are qualified to assist with developing the maintenance plan. Some contacts are:
Tonia Moy, Architectural Historian
Glenn Mason, Principal
Joy Davidson, Preservation Architect
Who do I contact for more information?
Property Technical Officer
Real Property Assessment Division
Budget and Fiscal Services Department
City and County of Honolulu
842 Bethel Street
Honolulu, Hawaii 96813