Property tax and inflation.

[HereOnThePrimalEdge]

Another hobby I have is to look at the tax on properties I find intriguing.
Here’s one with a small house and a separate garage, a little under an acre, and their property tax DOUBLED! in 2017 from the rate they paid 2001-2016.  It went from $25 to $50.  It’s still $50.

[terracore]

"That's a great suggestion for Amrita! She could even invest the proceeds in something low risk and realize incremental gains that would not carry a high tax burden."

I'm the last person anybody should look to for tax advice. But as I understand it, this would be considered a long-term capital gain, and the tax rate would be a bracket that was dependent on other income generated that year. If one's income is low, the capital gains tax on a vacant land sale might be zero:

Long term capital gains rate

0%: Up to $94,050 (single) or $188,100 (joint) taxable income
15%: $94,051 to $583,750 (single) or $553,850 (joint) taxable income
20%: Over $583,750 (single) or $553,850 (joint) taxable income (these are unverified figures I found with an online search)

If too much income is an issue, the land would actually sell for more if owner financing was offered and the capital gains liability would be spread out over the term of the note, which, again, may create a zero tax liability situation. (If getting $100k for a property in one year creates a tax situation, getting $20k each year for 5 years may not). Plus, one could earn interest on the loan.

The other way to avoid taxes is a 1031 exchange, but that's really only for people looking to sell a property and buy another.

There are probably other loopholes to avoid capital gains taxes that I've never heard of as well.

[ironyak]

HereOnThePrimalEdge - It went from $25 to $50.  It’s still $50.
Maybe they qualified for the "very modest and well-built" homeowner deduction. 672 sq ft from 1937 - curious as to how they managed to maintain it for that long. Ohia framing? A continual rebuild over ~90 years = Cabin of Theseus? Or termite infected wreckage worth $50 in total (typical County taxing them at 100% without providing any services - seriously nothing to smile about! ;)

Any chance of a TMK or pic from Google streetview?

[HereOnThePrimalEdge]

curious as to how they managed to maintain it for that long.

The house is barely visible from the road, but from what I could see, you’re right, it has seen better days. What piqued my interest was the garden, it’s not a planned manicured property, but an intricate maze of narrow trails through the ohia and tree fern forest, with colorful vireya and other cool weather perennials planted throughout in a natural setting.

Considering the 150 inches of rain per year, and trees growing over and around the buildings it’s impressive that it’s stood the test of time. And you can’t beat the tax rate. If you look up the property on Zillow or similar, the estimated value is $350,000. I’d sell at that price to an algorithm in a heartbeat. We can still outsmart some of the AI some of the time.

Parcel Number
190091680000

[leilanidude]

My Leilani house was $534 in 2010.
It is now $2818.
No homeowner exemption.

[ironyak]

HOTPE - The house is barely visible from the road, but from what I could see, you’re right, it has seen better days.
While the land assessment looks low compared to some smaller neighboring lots, ultimately, it looks like the homeowner exemption negates pretty much all the assessed land and building values, hence the low tax rate. Maybe the County is not as much of a fan of the natural maze of perennials landscaping? I guess as kalakoa said - understanding assessments, priceless.

leilanidude - No homeowner exemption.
Maybe I'm missing the obvious (not full-time resident? STVR?), but care to share why not?

[leilanidude]

Maybe I'm missing the obvious (not full-time resident? STVR?), but care to share why not?
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A house in a mainland state with MUCH higher property taxes, gets that lucky exemption on it and the savings there is about the totality of my Hawaii County taxes.