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Tax exemptions are likely to be extended for people who lost their properties in the August 2023 Maui wildfires and owners of homes renting to survivors displaced by the disaster.

Two bills to accomplish that have been approved by the Maui County Council Budget, Finance, and Economic Development Committee and will go next to the full council.

brings a few amendments to the Maui County Code.

Properties that were either destroyed or located inside burn zones were totally exempt from property taxes for the fiscal year that began July 1. Under this bill those exemptions would be extended for a second fiscal year ending June 30, 2026.

This exemption costs the county $21.1 million annually, county Finance Director Marcy Martin told the council.

About 1,400 property owners who rented to wildfire-displaced individuals with leases of one year or longer were also granted a full tax exemption for the current fiscal year, at a $12.3 million cost to the county. If they extend their leases for at least six months, they will receive a long-term rental exemption of $200,000 for the next fiscal year starting July 1, 2025.

This includes short-term rental properties leasing long-term to displaced survivors.

“For this fiscal year, their taxes were zero; they didn’t even pay the minimum tax,” Martin said at the committee meeting last week. “For this following fiscal year, they would move into our long-term rental program. So, while their taxes wouldn’t reduce to zero, they would be reduced significantly.”

For the current fiscal year, property owners renting to fire-displaced individuals with leases of at least six months, but shorter than one year, were eligible for a $300,000 exemption. This program cost the county $2 million. But most of these six-month leases expired, and without current applications, the program is estimated to cost considerably less next fiscal year, Martin said.

Council member Tamara Paltin questioned whether a rental cap to qualify for a tax exemption could be added to the bill, given that some property owners are charging thousands of dollars more than the rental assistance provided by the federal Department of Housing and Urban Development.

“It’s a policy decision,” Martin said, adding it is “unfortunate this is happening, but at the same time, even losing a few rentals would be a hardship.”

The second tax measure, , extends the deadline for wildfire survivors to maintain their exemption from tax year 2024 for properties where improvements were destroyed or made uninhabitable by the wildfires. This exemption was previously set to expire at the end of this year.

Paltin said there has been a varied response to the completion of debris removal in residential areas of Lahaina. Some people are already putting up roofs, while others are still navigating the permitting process. Even those whose houses were spared had significant expenses for removing carpeting, curtains and furniture, she said.

“I think this is a very prudent measure to try to keep our residents, who are also homeowners, and their properties and give relief to those businesses and other properties for one more year,” she said.

Jonathan Helton, policy researcher at the Grassroot Institute of Hawaii, said the deadline extension recognizes cleanup and rebuilding have been unpredictable and slow.

“Lahaina property owners should not face the risk of paying property taxes on land or buildings that they cannot legally rebuild or inhabit,” he said in submitted testimony.

Committee Chair Yuki Lei Sugimura said the focus is on Lahaina for “obvious reasons,” but both bills will also help the Upcountry area where 26 homes burned in the 2023 wildfires.

The proposals faced no opposition from Mayor Richard Bissen’s administration, which asked the council to expedite work on the bills so they could be adopted before the end of the year.

Civil Beat’s coverage of Maui County is supported in part by a grant from the Nuestro Futuro Foundation.