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Your Guide to Property Taxes in Hawaii

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When I speak to house-hunters considering owning property in Hawaii, one of the many “How to move to Hawaii” questions I hear centers around property taxes.

Can you buy property in Hawaii and avoid property taxes if you use it as a holiday home? How do Hawaii’s property taxes vary across the state? How does Hawaii’s property tax compare to that of other US states? Are cars and boats subject to tax?

To help get your property taxation questions answered, I’ve put together and quick and simple guide to give you all the facts.

Property Taxes in Hawaii: The Basics

Like most US property taxes, Hawaii’s property tax is an annual fee, calculated based on a 100% fair market value of your property or your land. A yearly assessment based on up-to-date market data is used to calculate this value. The tax rate is applied at a figure of X per $1000, and these rates vary substantially between the 4 counties of Hawaii. Click below to get more information direct from each county’s official site:

Compared to the rest of the US, property taxes in Hawaii are very low – in fact, as of 2015, they are the lowest in the country, with an average annual bill of $482. Compared to the US’s steepest states for property tax, this is very reasonable indeed. By comparison, property owners in New Jersey face an annual property tax bill of $3,971.

Cars, boats and vehicles are not subject to property tax in the islands.

Island Variations

Property taxes do vary from county to county in Hawaii. Here are the rates for 2014/15 for homeowners and landowners – per building or plot – who do not have exemptions (more on these later).

  • Hawaii – $6.15 per $1000
  • Honolulu – $3.50 per $1000 ($6.00 per $1000 on properties over $1,000,000)
  • Maui – $5.57 per $1000
  • Kaui – $6.05 per $1000

Home Exemption

Can you buy property in Hawaii and enjoy home exemptions? Owning property in Hawaii can be a great investment, but if you’re not living in your property as your primary address, you will not be eligible for exemption from Hawaiian property taxes. If, however, your Hawaiian property is your primary address, you can receive Hawaii property tax exemption, which starts at the basic rate of $40,000. You will need to prove permanent residence in your county by:

  • Living in the property a minimum of 270 days of the year
  • Ensuring you do not receive property tax exemption on any other property
  • Registering to vote in the county
  • Filing an income tax return as a resident of the State of Hawaii
  • Recording your ownership at the Bureau of Conveyances

Individuals with disabilities or over the age of 65 may be eligible for exemptions around $80,000. In Kaui this can rise to $120,000.

If you buy a new property, or your life circumstances change, you will need to apply for a new exemption with your county authority (see list above).

Remember: Like tax rates, exemptions may vary from county to county.

Property Tax on Shared Ownership Properties

If you are thinking about owning property in Hawaii in collaboration with a group of others (a time share, for example) your property tax bill will not be subject to an exemption, however, you can ensure every owner receives an assessment notice and tax bill in the post. Unfortunately, the Hawaiian counties cannot provide pro-rata calculations for each owner, these must be worked out among the group.

What Are Hawaiian Property Taxes Spent On?

In many US states, property taxes go straight into each region’s education system. In Hawaii, however property taxes are used to fund public servants, from lifeguards and park wardens, to firefighters and police.

Helpful Resources

The following websites may be helpful to you when working out your potential property tax bill in Hawaii, and for claiming exemptions:

Looking for more information on how to move to Hawaii and whether you can buy property in Hawaii? We’re always happy to offer help and advice. Talk to the Live on the Big Island team today on (808) 217-8500.

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