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Assessment notices will be mailed this month to property owners on all the Hawaiian Islands with the exception of Oahu.

Even though appraisers strive to keep assessments at fair market value, the notices may not reflect the full extent of the hard times that owners and landlords have been dealing with. For example, triple-digit increases in foreclosures are making Hawaii a top 10 state for foreclosure activity in the nation.

If you determine that an error has been made on your assessment notice or you do not agree with the value placed on your property, you should pursue an appeal.

Foreclosures Skyrocket

Hawaii’s foreclosure problems have spread beyond the resort and second-home markets. Commercial businesses are now also being hit hard.

For 2009, the number of foreclosures rose 183% to 9,002. That’s the most since RealtyTrac,
an online marketplace for foreclosed properties, began tracking the numbers in April 2005.
The areas currently suffering with the most foreclosures are Kailua, Ewa Beach, Kihel and Waikiki. Foreclosure rates in the double-digits are predicted to continue through 2010, according to the report.
 

Grounds for Appeal

If your property assessment seems excessive, your first step is an informal discussion with the assessor. Many times these meetings can clear up problems of over assessment. If unsatisfied, you may take your case to the Board of Tax Review or directly to the
Tax Appeal Court.
 

There are many different grounds for a formal appeal, including:

• Assessed value exceeds the ratio of assessment to market value by 20% or more

• A lack of uniformity or inequality exists in the assessment method

• There is an error in the application of the assessment method

• The taxpayer was denied an exemption to which he was entitled

Regardless of the date of your case hearing, only data prior to the assessment date of
January 1 may be submitted as evidence. For example, 2009 calendar year construction and sales data was used by the Real Property Tax Division to set the 2010 assessment valuations. 2010 data will be used for the 2011 assessments.

Adjudicated Values

The Tax Board of Review will render a decision after hearing your case. The written decision is mailed within a few weeks. The Board’s decision regarding your appeal is only applicable for the tax year in which an appeal is filed. If the value is overstated again the following year, a new appeal must be pursued.

It’s important to note that even though you may have an appeal pending, you must pay all of the property taxes by the respective due date or you will be charged penalty and interest.