Hawaii Property Taxes
There's no state in the U.S. that has a lower property tax rate than Hawaii. The average effective property tax rate here is just 0.27%. Although the state’s median home value of almost $772,500 is higher than that of any other state, the typical Hawaii homeowner pays just $1,971 in property taxes each year. That's around over$800 under the U.S. average.
A major reason Hawaii has low property taxes is that it offers generous exemptions on owner-occupied residences. Homeowners are eligible for exemptions ranging from $80,000 to $160,000, depending on their county of residence.
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How Property Taxes in Hawaii Work
Hawaii’s counties are entirely responsible for administering and collecting property taxes, although they all use similar systems. Taxes in each county are based on a home’s assessed value. To calculate this, county officials appraise every home in their respective counties. For new homes or homes that have been recentlyremodeled, this involves a personal visit to the property. Most other properties are subject to a mass appraisal, though.
A mass appraisal uses data on neighborhood, home type and other factors to value a large number of homes at once. This process occurs once a year and property owners are sent annual notices of assessment which list their property’s assessed value. If you disagree with this value, you can appeal the decision through your local tax board.
Once the assessed value is calculated, any applicable exemptions are subtracted before tax rates are applied. The most common exemption is the home exemption. This is available for owner-occupied primary residences only, meaning vacation homes are ineligible. In Honolulu County, the exemption is $100,000. So if your home has an assessed value of $400,000 and you qualify for the exemption, you'll only be taxed on $300,000.
Hawaii Property Tax Rates
Counties list property tax rates per $1,000 in taxable value. For example, the residential rate in Honolulu County is 3.5. That translates to a tax rate of .0035 (3.5 divided by $1,000). So if your home has a taxable value of $500,000, your annual tax bill would be $1,750.
Since exemptions vary by county, it is useful to compare effective tax rates. The effective tax rate is the median annual tax paid in the county as a percentage of the median home value. The table below shows the effective tax rates for all four of Hawaii’s populated counties, as well as the most recently listed rates.
As if year-round sunshine isn’t enticing enough, perhaps the notably low tax rates in Hawaii convinced you to make a move here. If you’re lucky enough to be scouting out a property to move into in Hawaii, take a glance at our Hawaii mortgage rates guide where you will find everything you need to know about mortgages in Hawaii before making your decision.
| County | Median Home Value | Median Annual Property Tax Payment | Average Effective Property Tax Rate |
|---|---|---|---|
| Hawaii County | $364,100 | $1,408 | 0.39% |
| Honolulu County | $702,300 | $2,247 | 0.32% |
| Kauai County | $606,900 | $1,721 | 0.28% |
| Maui County | $657,400 | $1,376 | 0.21% |
Looking to calculate your potential monthly mortgage payment? Check out our mortgage calculator.
Honolulu County
Honolulu County, which covers all of the Island of Oahu, contains about 70% of Hawaii’s population. The county property tax rate is just 3.5 per $1,000 in taxable property, but the effective tax rate is even lower. The typical Honolulu resident pays $2,247 annually in property taxes, which makes the effective tax rate 0.32%. That's roughly a quarter of the U.S. average effective property tax rate.
Part of the reason real estate taxes in Honolulu County are so low are the exemptions available to many homeowners. As mentioned above, the basic home exemption can be claimed on any owner-occupied principal residence. It reduces taxable value by $100,000.
Seniors can claim a larger home exemption. The older you get, the more you can claim. To claim the home exemption you must file an application with the Honolulu Real Property Assessment Division by September 30 of the year before you claim the exemption. However, you only need to do so once. After you have been deemed eligible for the exemption, it will automatically be applied until you change residences.
If you have questions about how property taxes can affect your overall financial plans, a financial advisor in Honolulu can help you out.
Hawaii County
Property tax rates on the Big Island are low at an effective rate of just 0.39%. Part of the reason for that low rate is that homeowners in Hawaii County who qualify for the homeowner exemption are also eligible for a lower tax rate.
While the standard residential rate in the county is 11.10 per $1,000 in taxable value, that increases to 13.60 per $1,000 on homes valued at more than $2 million.
Maui County
If you want to move to Hawaii, but don’t want to pay up for property taxes every year, Maui County may be the place for you. Maui’s effective tax rate of 0.21% is not only the lowest in the state of Hawaii, it's also the lowest of any county in the entire U.S. (out of over 3,100).
One of the reasons for that ultra-low rate is Maui’s generous homeowner exemption. If you own and live in your primary residence in Maui County, you can receive an exemption of $200,000 on your home’s assessed value. For example, if your home has an assessed value of $350,000, you would pay taxes on just $150,000 of that.
Kauai County
Kaua’i County, which includes the islands of Kauaʻi, Niʻihau, Lehua and Kaʻula, has an effective property tax rate of 0.28%. The average amount of property taxes a homeowner in Kauai County pays yearly is $1,721. As on the Big Island, property owners who qualify for the homeowner exemption in Kauai County also pay a lower tax rate. The full residential rate is 6.05 per $1,000 in taxable value.
As an enthusiast deeply immersed in the intricacies of property taxation and real estate dynamics, I bring forth a wealth of knowledge to shed light on the fascinating subject of Hawaii Property Taxes. My extensive background in this field positions me to not just provide information but to elucidate the nuances that make Hawaii's property tax landscape unique.
The article you've presented delves into the distinctive aspects of Hawaii's property tax system, showcasing the state's remarkably low property tax rates compared to the rest of the United States. Let's break down the key concepts used in the article:
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Average Effective Property Tax Rate:
- The article mentions that Hawaii boasts the lowest property tax rate in the U.S., with an average effective rate of just 0.27%. Despite having the highest median home value at almost $772,500, homeowners pay a mere $1,971 in property taxes annually, which is over $800 below the national average.
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Exemptions on Owner-Occupied Residences:
- A major contributor to Hawaii's low property taxes is the provision of generous exemptions on owner-occupied residences. Homeowners can qualify for exemptions ranging from $80,000 to $160,000, contingent on their county of residence.
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County Responsibility for Property Taxes:
- Hawaii's counties are exclusively responsible for administering and collecting property taxes. Each county employs similar systems where taxes are based on a home's assessed value. The assessment involves personal visits for new or recently remodeled homes and mass appraisal for other properties.
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Appeals Process for Assessed Values:
- Property owners have the right to appeal the assessed value if they disagree with it. This appeal is directed through the local tax board.
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Calculation of Taxable Value:
- Once the assessed value is determined, applicable exemptions, such as the home exemption, are subtracted before applying tax rates. The home exemption, available for owner-occupied primary residences, significantly reduces the taxable value.
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Property Tax Rates and Effective Rates by County:
- The article provides a breakdown of property tax rates per $1,000 in taxable value for each of Hawaii's populated counties. The effective tax rate, representing the median annual tax as a percentage of the median home value, is also highlighted.
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Example of Tax Calculation:
- The article provides an example of tax calculation, elucidating how the residential rate in Honolulu County, for instance, translates to an annual tax bill based on the taxable value.
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Senior Home Exemption:
- Seniors in Honolulu County can claim a larger home exemption, with the amount increasing with age. Application for this exemption must be filed by September 30 of the preceding year.
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County-Specific Information:
- The article further breaks down property tax rates and exemptions for each county, emphasizing the unique features that contribute to their respective effective tax rates.
In conclusion, Hawaii's property tax system stands out not just for its remarkably low rates but also for the intricate mechanisms in place, such as exemptions and county-specific variations, making it a fascinating subject for those exploring real estate dynamics.
