Assessed residential property values have just shot up an average of 15.1 percent — less than in each of the past three years.

But the cumulative effect means property taxes next year will be even higher for most homeowners than last year, when hundreds of complaints persuaded the City Council to increase the homeowner exemption.

About 278,000 property owners can expect to find assessment notices in the mail beginning today. You also can find your assessment online at www.honolulupropertytax.com.

The notices are in advance of property tax bills, which will be sent in July.

The increases for single-family homes were highest on the Leeward Coast, Ka'a'awa to Kahuku and in Wahiawa; for apartments and condominiums, they were highest on the North Shore and in Leeward and 'Ewa communities.

In previous years, urban and East Honolulu, and Windward O'ahu, increased the most as real estate prices in those areas skyrocketed.

"People have been moving out of town, where the market is higher, going to the cheaper areas," said city budget and fiscal services director Mary Pat Waterhouse.

Kailua resident Bob Grantham, who helped lead a grassroots effort to press for tax relief this year, said he'll be back at City Hall next year. He provides an example of how much values can differ, even within a district.

Although overall property values for his area went up 12.5 percent (including new construction and home improvements), his rose 38 percent.

Grantham said his property's net value went from $985,600 to $1,355,500. He recognizes that for the past three years, almost any lot in his Kailua neighborhood could have been classified as "a red-hot property."

Looking back at three years of assessments, Grantham found "on my home, the value has gone up 88 percent," he said.

Grantham owns a large canalfront two-story home in Enchanted Lake. It's a big house — seven bedrooms and six bathrooms — that he expanded for his family over the years, but he hasn't done any additions over the last year. "I've just done some work on my kitchen, but that's going to hit next year."

Even though he was expecting some increase, he said, he was still surprised it rose so sharply. "I'm still shook up."

He said he'll be suggesting that property taxes be limited to an increase of no more than 4 percent a year.

The council sets the tax rates each year. If rates are not rolled back, residential property owners could expect to pay higher bills based on the increased values.

Mayor Mufi Hannemann said he'll work with the City Council on tax rates. He said the smaller assessment increase this year "shows that our robust economy is slowing down somewhat, so it's good that we have taken steps to save money. "

$109M MORE FOR CITY?

Waterhouse said the increased values would bring in an estimated $109 million if rates and everything else remain the same.

Hannemann said it's too early to describe exactly what would be the best use of the extra money. "I think we should sit down now and sort this through and see if it's possible to give tax credit," he said.

Councilman Charles Djou said city officials shouldn't expect people to just pay bigger bills based on the higher values. "It's too much," Djou said. "This is just sucking up money from people that they don't have."

Djou said he's open to proposals that would cap the percentage increase possible in a given year.

Gary Kurokawa, the administrator of the Real Property Assessment Division, said the values are set as of Oct. 1 and based on recent sales of similar properties though June 30.

Since summer, sales have slowed somewhat from the frantic market of the past few years.

"We're seeing a flattening of sales prices, as opposed to the skyrocketing trend of the past few years," he said. But that trend won't show up until next year — if it continues.

Waterhouse said new construction, and renovations and additions made to existing homes, pushed up some of the overall figures.

For the first time, city officials released valuations without factoring in new construction and other additions. Disclosed that way, the single-family valuation averaged an 11.8 percent increase. The new construction and additions, not included in that figure, kicked in another 2.1 percent.

And for apartments and condos, the values increased 14.9 percent islandwide. New work added 3.5 percent to that, she said.

Kurokawa said homeowners should carefully review their information in detail to ensure they are getting the right exemptions.

He said it's important to ask questions now, when there's time to appeal or correct exemptions.

"The bottom line is: Do I have the right exemption? Does my assessment look reasonable?"

Kurokawa said 6,000 people appealed last year, and 2,900 appeals have yet to be resolved.

There is a bit more relief for some this year, said Waterhouse, who pointed out that homeowner exemptions doubled this year, from $40,000 to $80,000 for those younger than 65, and that the exemption goes to $120,000 for those 65 and older. And people who earn less than $50,000 can apply for a credit that caps their tax at 4 percent of their income.

Reach Robbie Dingeman at rdingeman@honoluluadvertiser.com.