Big Island Property Tax Assessment Explained

Why Can Market Value Differ so Much From the “Assessed Value” of a Property on the Big Island?

Last fall, we called the Hawaii Island County Tax Department to ask them about the tax assessment process, and here is what they told us:

  • There are 135,000 parcels on the BI and 9 assessors (short 4).
  • All properties are re-assessed each year in January.
  • They do not go to each property individually (that would be a physical impossibility), they conduct mass assessments.
  • Every property is categorized into a neighborhood and they use a land pricing index based on market value to determine assessment amount.
  • They only re-assess if there has been an appeal filed, if there is a “mistake” and it doesn’t look right and it is brought to their attention, or if a new structure has been built and the permit is finaled.
  • First priority are new homes or new additions.
  • The tax office assesses by what structures are actually built on the property, not by what is permitted.
  • They do rely on filed and completed permits to know if a property needs re-assessment.

Differences in the Way Property Taxes are Determined in Hawaii Versus the Mainland

In Hawaii, tax rates are determined by dollar per 1,000. On the mainland they use percentages. Also on the Big Island, there is a yearly 3% cap on property tax increases, a benefit in an up market.

In a down market, as the values of homes decrease the assessment can go up 3% regardless, therefore, assessed value can increase even as the market decreases. If brought to the tax office’s attention, in a down market, they will reassess accordingly, but only if the homeowner appeals the assessed value. The appeal form can be found on the Real Property Tax Website under “Forms.”

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8 Responses to “Big Island Property Tax Assessment Explained”

  1. Heidi White, R(S)
    February 10, 2012 at 8:59 pm #

    Nice Job, well done Katie, This is a great reference.
    When do you have the time to do all of this stuff?

  2. Tara Kelly
    February 11, 2012 at 2:48 pm #

    Thank you Katie for sharing. My clients ask me all the time how this works. Now I can send them to your blog!

    • Katie Minkus, R(BIC)
      February 11, 2012 at 2:48 pm #

      You’re welcome, Tara – that’s exactly why I wrote it! Send away!

  3. Beth Thoma Robinson, R(B)
    February 15, 2012 at 3:45 pm #

    Katie, this is one of the most useful posts on our website and I hope it will get featured! I know I will be sending lots of prospective buyers to this information.

  4. Pat Strausse, RB
    February 16, 2012 at 5:38 pm #

    Katie,

    I knew some of this information but not all of it – thanks for putting it together for all of us
    to use. It answers so many buyer questions. Mahalo!

    • Katie Minkus, R(BIC)
      February 16, 2012 at 5:46 pm #

      You’re very welcome, Pat! So glad to hear you’ll find it useful with your clients!!

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