HOME EXEMPTION  The first home exemption law was enacted in 1896 by the Republic of Hawaii to provide some tax relief, encourage home ownership and the settlement of land. In 1896, the home exemption amount was $300. Beginning tax year 2024-2025, the home exemption will be $120,000 for homeowners under the age of 65 as well as for homeowners who do not have their birthdate on file. This means that $120,000 is deducted from the assessed value of the property and the homeowner is taxed on the balance. For homeowners 65 years and older the home exemption is $160,000. To qualify for this exemption amount, you must be 65 years or older on or before June 30 preceding the tax year for which the exemption is claimed. Property owners with an existing home exemption, with their date of birth on file, do not need to re-apply for the new exemption amounts. The exemption amounts will automatically increase depending on the age of the homeowner. WHO MAY QUALIFY FOR A HOME EXEMPTION? You are entitled to the home exemption if: You own and occupy the property as your principal home "real property owned and occupied as the owner's principal home" means occupancy of a home in the city with the intent to reside in the city. Intent to reside in the city may be evidenced by, but not limited to, the following indicia: occupancy of a home in the city for more than 270 calendar days of a calendar year; registering to vote in the city; being stationed in the city under military orders of the United States; and filing of an income tax return as a resident of the State of Hawaii, with a reported address in the city; Your ownership is recorded at the Bureau of Conveyances, State Department of Land and Natural Resources, in Honolulu on or before September 30 preceding the tax year for which you claim the exemption. In the case of a lease, the document must indicate that the lessee has a lease for residential purposes for a term of five years or more and will pay all property taxes; You file a claim for home exemption online or fill out Form (E-8-10.3) with the Real Property Assessment Division on or before September 30 preceding the tax year for which you claim the exemption. If you file online and do not receive an email confirmation after submission, please contact our office. Property held in a company name, such as an LLC, may not receive a home exemption.  Call the Real Property Tax office at (808) 768-3799 for more information. SINGLE HOME EXEMPTION The law allows just one (1) home exemption; if spouses live apart and own separate homes, each shall be entitled to one-half (1/2) of one exemption or to an exemption apportioned between their respective homes in proportion to the assessed value. IF YOU SELL, RENT MORE THAN TWO BEDROOMS, OR MOVE TO ANOTHER HOME If there is any change which might affect your home exemption eligibility, such as no longer occupying the property as your home, ceasing to own the property, and/or renting more than two bedrooms of the property during the tax year, then you must report the change M-8-10.1 to the Real Property Assessment Division, Department of Budget and Fiscal Services, City and County of Honolulu. The report must be submitted within 30 days of the change. Failure to file a report within 30 days of any change in status may result in a penalty and additional real property taxes being assessed For more information call the Real Property Tax office at (808) 768-3799, or to file your home exemption online visit https://realproperty.honolulu.gov/exemption/file-exemption/ Please be sure to have you Parcel ID or TMK number available if planning to file online. If you need assistance finding your Parcel ID or TMK number, feel free to email us at info@OnePacificRealty.com

In a significant announcement, Federal Reserve Chair Jerome H. Powell revealed that the central bank will begin cutting interest rates starting September 18. This move comes after months of speculation and is expected to have a profound impact on various sectors of the economy, including real estate. What This Means for Homebuyers For prospective homebuyers, lower interest rates typically translate to more affordable mortgage options. With reduced rates, monthly payments on new loans are likely to decrease, making homeownership more accessible to a broader range of buyers. If you've been on the fence about purchasing a property, this could be the perfect time to make your move. Impact on Real Estate Investors Real estate investors might also find this to be a favorable environment. Lower borrowing costs can improve the return on investment for rental properties and make refinancing existing loans more attractive. Additionally, as borrowing becomes cheaper, we may see increased competition for investment properties, driving demand in the market. Sellers: An Opportunity to Attract More Buyers For those looking to sell their homes, the announcement could bring a surge of potential buyers into the market, eager to take advantage of the lower rates. This could result in quicker sales and possibly higher prices due to increased demand. Conclusion Jerome Powell's announcement of rate cuts starting on September 18 is poised to energize the real estate market. Whether you're buying, selling, or investing, these changes could offer new opportunities. Stay tuned as we monitor how these rate cuts unfold and continue to impact the real estate landscape. *See Speech by Jerome H. Powell on August 23, 22024 reposted from The Federal Reserve News & Events: Review and Outlook

When buying property, understanding ownership types is crucial. Two main options exist: Fee Simple and Leasehold. Let's break down the pros and cons of each to guide your real estate journey. FEE SIMPLE: The American Dream? Pros: Complete Ownership: You own both the land and the building, offering maximum control and flexibility. Equity Building: As property values rise, so does your equity. Financing Options: Securing financing for fee simple properties is generally easier. Freedom to Modify: Make renovations or changes as you see fit, within legal guidelines. Cons: Higher Upfront Cost: Buying land in addition to the structure translates to a higher initial investment. Property Tax Burden: You're responsible for all property taxes associated with the land and building. Maintenance Responsibility: The upkeep of the entire property falls on your shoulders. LEASEHOLD: A Different Path to Property Pros: Lower Upfront Cost: You're only buying the building on the leasehold property, making it potentially more affordable. Less Maintenance: The landowner typically handles exterior maintenance, freeing you from some burdens. Cons: Limited Ownership: You don't own the land, so you can't build equity on it. Leasehold Fees: On top of your mortgage, you'll pay regular ground rent to the landowner. These fees may increase over time. Renewal Challenges: Renewing the lease at the end of its term can be expensive or even impossible. Restrictions on Use and Modifications: The landowner's lease agreement may limit how you use or modify the property. The Takeaway: Fee Simple offers more control and long-term benefits, but requires a larger investment. However, Leasehold can be a great option for budget-conscious buyers who prioritize affordability, less maintenance, and prefers the benefits of owning versus renting. Remember: Consider your long-term goals and financial situation. Talk to a real estate professional to understand the specific market dynamics and implications of Leasehold ownership in your area. Connect with ONE of our Agents to learn about the Fee Simple and Leasehold opportunities available on Oahu.