Kauai Real Estate and Local News April 14
Aloha From Kauai! It’s been getting warmer but still a little chilly at night. We’ve also had “vog” visiting us from the Big Island, read more about this in my posting today. For real estate news I’ll be posting a special piece about a tax law that was passed concerning leasehold land and a little history on this type of land ownership. If you have any questions your welcome to contact me.
*****Real Estate News*****
The spotlight is on leasehold land. Leasehold land is very common here in the State of Hawaii and was born out of the need for affordable land in the 1960’s. Lease’s are now at a point in Oahu where they will be coming due and the State has passed a bill in June of 2007. Act 166, tax exemption incentive for fee owners to sell. It is a “carrot” incentive in an effort to avoid a possible “stick” of a statewide mandatory conversion law for condos and co-ops.
Act 166 was signed into law by the Governor and it provides capital gains tax exclusion to leased-fee owners who sell their interest to the Association of Apartment Owners. This creates a win-win situation for everyone since lessees would get fee simple home ownership, fee owners can profit in reinvestment and the state can free up millions of dollars to be put into the economy, hopefully generating use tax dollars that would not be generated otherwise. This tax free exclusion will expire on December 31 2012. So at a State level there would be no tax but there would be tax on the Federal level. To answer that H.R. 2613 was recently introduced by Representatives Abercrombie and Hirono to provide a similar capital gains tax exclusion from federal income taxes. Given that this bill represents and affects a very minor issue from a national perspective and is unique to Hawaii, there is no guarantee that Congress will consider it this year let alone take action on it. To see a copy of this bill click this link…..Leasehold Land Act
*****Real Estate Sales and New Listings*****
Our number of sales have held up to the same levels that they have been at for the last several weeks. We expect our activity to get a little stronger with the majority of spring breaks behind us. For a complete list of what has come on the market and what has sold CLICK HERE
*****Hawaii Tourism Authority Helping With Stranded Passengers*****
The Hawaii Tourism Authority is adding charter flights daily to help out passengers who were scheduled to fly home on Aloha or ATA airlines. Given the new flights that had been added by Delta, Alaska Airlines and United we don’t expect to be running short on seats after the readjustments.
*****Aloha Airlines Sells Off Cargo Division*****
Aloha Airlines was running in the black with their cargo business and it still is in operations. A Seattle based company, Saltchuk Resources, Inc. Saltchuk was given the green light by the Honolulu Bankruptcy Court to purchase the company. Given this is not a normal sale there is some protocol to follow. Here is what Saltchuk Resources is outlining to happen:
“Due to the fact that the bankruptcy court will not announce a winner of the auction until April24th, and closing is required to occur the following day on the25th, we are thus required working on a transition plan that will ensure continuity of all Aloha air cargo operations.
There are many issues that we are working on, complicated by the fact that we are acquiring assets as opposed to purchasing the stock of an ongoing business. The most important is our need to hire employees at our new Hawaiian corporation to allow operations to continue without interruption. “
Union officials for the airline are in heavy negotiations for the Aloha Airlines pilots to be re-hired.
*****Vog Visits Us From The Big Island*****
Kauai’s eastside has been hit with Vog from the Big island. Vog is elevated sulfur dioxide levels from active volcano’s and creates a haze over all the islands. Kilauea volcano has been erupting since January 3, 1983 but recent activity forced the closure of Volcano’s National Park on Hawaii. 2,000 people were evacuated from the park and one school was closed. On Wednesday night the noxious gas forced an explosion which sent rocks 230 feet in the air. On Thursday the winds had shifted enough to allow the park to be re-opened which includes the 42 room Volcano House hotel and Kilauea Military Camp.