Aloha Fellow Owners,
Invoices were recently sent for your annual property taxes covering the County of Maui fiscal year beginning July 2011. The billing also includes the annual land purchase assessment.
As you know, real property taxes became a huge target for Maui County to raise new revenue for the county budget. The Sands Board and the entire Maui timeshare community, led by our timeshare trade association, ARDA, were able to significantly reduce the Maui Mayor’s original 40% increase proposal to 7%. We would have liked to not have an increase at all, but when it became apparent that the tax rate was going to be increased, the only question was by how much. Timeshare was not the only classification that was targeted, as the Maui County Commissioners raised the tax rates on nearly all of the classifications. Hotels increased nearly 8.5% and apartments 10%.
The property tax is based on one-hundred percent of the unit value as determined by the county tax assessor. As the real estate market in Hawaii has declined, so have the assessed values of the vacation club units. We have continually monitored the assessed values and filed appeals with the tax department on any assessments that we felt were higher than actual value.
The majority of the Maui County operating income is derived from property tax. The declining property values directly result in declining Maui County revenue. Maui County has compensated for the declining value/revenue by increasing the tax assessment rate. The tax rate for timeshare units has been set at $15.00 per $1,000 of value, an increase from the $14.00 rate last year.
However, the 7% increase in the 2011 tax rate was more than offset by our continuing appeals and the reduction in assessed value, resulting in everyone’s tax bill being lower than 2010 as shown below.
We will continue to monitor all of the Club’s expenses to help keep our maintenance fees and real property taxes at or below their current amounts.
Sands of Kahana Vacation Club