Aloha BP Ohana,

It seems like nothing but bad news lately, so how about some good news. Maui County has passed new property tax relief for long-term rental landlords to encourage landlords to rent LTR vs STR. They are offering to start in this relief in 2022 it will give a $200,000 tax exemption to landlords that have tenants longer than 1 year in their property. This exemption before was only available to homeowners that occupied the property and did not rent it out. Even more great news, they are also going to up the homeowner exemption to $300,000 for owners that have an ADU on their property that is rented for greater than 1 year. Please see the link for more information.

 https://www.mauicounty.gov/civ...

Thanks Colby!  This is good stuff, I will happily fill that out!  Mahalo!

this is AWESOME!!!!! @Zasha Smith

Yeah, encouraging news indeed. Good find! When you pair the new exemption with an assessment appeal, you may now be able to get something that resembles a fair tax valuation in Maui County ;)

Thanks for posting this. I guess that means harbor lights rentals will now be tax free haha!

I dunno, I'm not a fan of this. Why can't we all be taxed the same and just do what we damn well please with our very expensive Maui properties? 

This will basically create a lot more enforcement bureaucrats to split hairs and not return your calls. Great.

When did long-term become 12 months? What about the six months mentioned in all the other Maui County rules?? A lot can happen in a year, and it doesn't serve tenants or landlords to lock someone into a long contract and then someone dies, or loses a job or starts selling meth or . . .

Good morning Loren,  @Loren Clive I understand what you are saying about paying the same rate but we don't so to me this is the next best thing. If you do not want to sign a one-year rental agreement to save on your property tax that is your choice but you will not receive the tax credit. To me, it's like HUD/Section8 you can deal with it or not it is your choice no one is making do it. If you do choose to take it there are some strings/red tape atached to receive it, welcome to US government programs.

For me, it is not a big deal most of my tenants have rented from me for over 5 years.  I have had tenants move from one of my rentals to another one as their living requirements have changed and they needed more space or less space.  I have also had tenants not stay the original six-month rental agreement due to personal reasons.  Had a tenant get into a physical confrontation with a neighbor four months into the rental agreement and wanted to move.  Had one buy a home and move again about four months into the six-month agreement.  My wildest one was taken away by Federal agents and moved in to witness protection, I have no clue what happened all I know is the agents were there showed their badges and paperwork, and the tenant and their personal items were gone in about an hour. The shortest I have had was one week, tenant seemed good when we screen them but once they moved in they seemed to have some sort of mental issue, maybe bipolar, I'm not sure but they were unhappy when I told them they were not allowed to have dogs per the agreement, they said the dogs were just visiting.  I told them either way no pets allowed so they requested to move out, which I allowed, I do not need the grief. 

The Maui rental market is so hot my point is if a tenant wants to break a rental agreement let them you will have a new tenant in the next day if you want.  A friend advertised a 2b/1ba cottage in Pukalani in January for $2000 per month and received over 80 inquiries about it.  They felt overwhelmed so they took the ad down and relisted it at $2400 per month and got eight inquiries and was able to pick a tenant that they are very happy with.

I agree a lot can happen in a year but that is why as landlords we need to screen, have reserves, and keep open lines of communication with our tenants.  Yes, even if we do this things can go wrong but that is just the nature of the beast.

Aloha Colby

Originally posted by @Colby Hanley :

Good morning Loren,  @Loren Clive I understand what you are saying about paying the same rate but we don't so to me this is the next best thing. If you do not want to sign a one-year rental agreement to save on your property tax that is your choice but you will not receive the tax credit. To me, it's like HUD/Section8 you can deal with it or not it is your choice no one is making do it. If you do choose to take it there are some strings/red tape atached to receive it, welcome to US government programs.

For me, it is not a big deal most of my tenants have rented from me for over 5 years.  I have had tenants move from one of my rentals to another one as their living requirements have changed and they needed more space or less space.  I have also had tenants not stay the original six-month rental agreement due to personal reasons.  Had a tenant get into a physical confrontation with a neighbor four months into the rental agreement and wanted to move.  Had one buy a home and move again about four months into the six-month agreement.  My wildest one was taken away by Federal agents and moved in to witness protection, I have no clue what happened all I know is the agents were there showed their badges and paperwork, and the tenant and their personal items were gone in about an hour. The shortest I have had was one week, tenant seemed good when we screen them but once they moved in they seemed to have some sort of mental issue, maybe bipolar, I'm not sure but they were unhappy when I told them they were not allowed to have dogs per the agreement, they said the dogs were just visiting.  I told them either way no pets allowed so they requested to move out, which I allowed, I do not need the grief. 

The Maui rental market is so hot my point is if a tenant wants to break a rental agreement let them you will have a new tenant in the next day if you want.  A friend advertised a 2b/1ba cottage in Pukalani in January for $2000 per month and received over 80 inquiries about it.  They felt overwhelmed so they took the ad down and relisted it at $2400 per month and got eight inquiries and was able to pick a tenant that they are very happy with.

I agree a lot can happen in a year but that is why as landlords we need to screen, have reserves, and keep open lines of communication with our tenants.  Yes, even if we do this things can go wrong but that is just the nature of the beast.

Aloha Colby

 I hope you at least got to keep the security deposit when the feds took possession of your tenant? Hahahahaha 

good points @Colby Hanley . You know, it's funny, despite my initial negative reaction, now I'm offering my longtime tenants a one year lease to take advantage of this--hahaha! 

I guess my frustration is the ever-increasing regulation of our lives by folks who really have no real world experience in whatever they're regulating. 

 As a landlord, you're only saving $1k/year per property, so it may not be worth it to sacrifice flexibility in leasing for that amount of money, depending on the property/ tenant. And ultimately this is not going to solve the lack of housing on Maui, it's just going to create more bureaucracy, which is my general objection.