What Is the Property Tax Rate in Hawaii?

Property taxes are a fundamental component of local government funding, providing essential revenue for public services like schools and infrastructure. For homeowners, understanding these taxes is a necessary step in managing real estate finances. In Hawaii, property taxes operate under a distinct framework that differs from many other states.

Hawaii’s Property Tax Framework

Hawaii implements a decentralized property tax system, with no statewide property tax. Each of the state’s four counties—Honolulu, Maui, Hawaii (Big Island), and Kauai—administers and collects its own real property taxes. This local control results in varying tax rates and regulations across the islands. Property taxes are calculated based on a property’s assessed value, determined by county officials, and a specific tax rate applied per $1,000 of that value.

County Property Tax Rates and Classifications

Property tax rates in Hawaii vary significantly across the counties and are further differentiated by property classification. These classifications include residential, commercial, agricultural, hotel/resort, and vacant land. Each county council sets these rates annually, which can lead to adjustments.

In Honolulu County, the residential tax rate for owner-occupied properties is $3.50 per $1,000 of assessed value. Non-owner-occupied residential properties (Residential A) are subject to a tiered rate structure, with rates from $4.00 per $1,000 for the first $1 million of value to $11.40 per $1,000 for values exceeding that amount. Maui County features owner-occupied tiered rates ranging from $1.65 to $5.75 per $1,000, depending on assessed value. Non-owner-occupied and short-term rental properties in Maui County generally face higher tiered rates.

Hawaii County (Big Island) applies a homeowner rate of $6.15 per $1,000 of assessed value. For non-owner-occupied residential properties, rates are tiered, starting at $11.10 per $1,000 for properties under $2 million and increasing to $13.60 per $1,000 for values above $2 million. Kauai County’s homestead rate for principal residences is around $2.59 to $3.05 per $1,000, while general residential rates are higher, often between $5.45 to $6.05 per $1,000. Vacation rental properties on Kauai are taxed at a higher rate, such as $9.85 per $1,000.

Understanding Property Assessment

Property assessment is a key step in determining the amount of property tax owed. County assessors determine the fair market value of each property within their jurisdiction. This valuation process involves analyzing recent sales of comparable properties, considering the property’s characteristics, and for commercial properties, evaluating income-generating potential.

Property owners receive an annual assessment notice, typically around March, detailing the assessed value of their property. The assessed value, used for tax calculation, may differ from the property’s purchase price or current market value. If a property owner disagrees with the assessed valuation, they have the right to appeal to the local tax board. The appeals process involves specific deadlines and may require filing a formal appeal form.

Available Exemptions and Payment Information

Hawaii offers various property tax exemptions that reduce a property’s taxable assessed value, lowering the overall tax bill. The most common is the homeowner exemption, available for properties serving as the owner’s primary residence. Exemption amounts vary by county and increase for senior citizens.

For example, Honolulu County provides a homeowner exemption of $120,000 for those under 65, increasing to $160,000 for residents aged 65 and older. In Hawaii County, the homeowner exemption starts at $50,000 for those under 60 and can rise to $125,000 for residents aged 80 and over. Maui County offers a $200,000 homeowner exemption, while Kauai County’s homeowner exemption ranges from $160,000 to $200,000 based on age. To qualify, owners must occupy the property for a specified number of days per year and file an exemption claim by a county-specific deadline.

Property taxes in Hawaii are paid in two semi-annual installments. The first installment is due around August 20, covering July 1 to December 31. The second installment is due around February 20, covering January 1 to June 30. Payment methods include online portals, mail, or in-person options at county tax offices. Failing to pay property taxes by the due dates can result in penalties and interest charges.