Buyer's Tip – Hawaii Real Property Tax Rates and the Home Owner's Exemption Help Lower Your Property Taxes
Aloha! Title Guaranty Escrow Services are one of the best escrow companies in Hawaii who provide excellent professional title history searches and escrow services for anyone buying or selling real estate in Hawaii.
Jenni Lee, Marketing Manager for the Big Island, was kind enough to send me the current Hawaii Real Property Tax Rates in Hawaii sheet, which I will gladly share here with you!
These rates may vary if you are an owner-occupant, second home or investor owner, and how your property is zoned. Please call me anytime to find out more about what types of tax advantages are offered through home ownership in Hawaii!
The Home Ownership Exemption has been prepared by the Real Property Tax Division to assist property owners in the County of Hawaii by providing an explanation of the benefits associated with the filing of a claim for home exemption. The home exemption is deducted from the gross value of your property to arrive at the net taxable value for the property.
The basic home exemption is $40,000. For homeowners 60 years of age and older, higher exemption amounts apply (see “Home Exemptions for 60 Years of Age or Over” below). In 2005, an additional exemption of 20% of the assessed value of property not to exceed $80,000 was also enacted.
Who qualifies for the home exemption?
You are entitled to the home exemption if:
1. You own and occupy the property as your principal home for more than 200 calendar days of a calendar year. The term “principal home” is defined as the place where an individual has a true, fixed, permanent home and principal establishment, and to which place the individual has, whenever absent, the intention of returning. It is the place in which a person has voluntarily fixed habitation, not for mere special, temporary, or vacation purposes, but with the intention of making a permanent home.
The three elements that are necessary for real property to be considered a “principal home” are:
- The taxpayer has no other home exemption, or principal home in any other jurisdiction
- Intent of the owner to create or maintain a principal home within the County
- Owner’s actual physical occupancy of the principal home within the County
2. The ownership of your property is recorded at the Bureau of Conveyances on or before December 31 preceding the tax year for which the exemption is claimed, or by June 30. All leases must be for a term of ten years or more and recorded at the Bureau of Conveyances in order for the lessee to qualify for the home exemption.
In the case of a lease of Hawaiian homestead land, either lessee and/or spouse shall be entitled to the home exemption. Proof of marriage must be submitted for the non-Hawaiian spouse claiming the home exemption.
3. You must file Form 19-71 for the home exemption on or before December 31, preceding the tax year for first half payment, or by June 30 for the second half payment.
Single Home Exemption
The law allows just one home exemption for any taxpayer. A husband and wife shall not be permitted exemption of separate homes owned by each of them, unless they are living separate and apart, in which case, they shall be entitled to one exemption to be apportioned equally between each of their respective homes.
Home Exemptions for 60 Years of Age or Over
- For those aged 60 to 69, the exemption amount is $80,000
- For those 70 and older, the exemption amount is $100,000
- To obtain the $80,000 or $100,000 exemption, the claimant must be 60 or 70 years of age on or before December 31, preceding the tax year
If You Sell, Rent, or Buy Another Home
If changes occur in the use of your home, such as renting, conducting a business, or you no longer occupy the home, you must report such changes to the Tax Office. These changes will affect your exemption.
If you recently purchased a new home it is IMPORTANT to file a new claim for exemption. You will not qualify for the exemption that was filed by the seller of the property, nor will a claim be transferred from your former residence, if you had one.
The Hawaii Home Owners Exemption Form is what you will file as you as your property closes and records in your name—if you will be living in the house as an owner-occupant on the Big Island of Hawaii. Check with your Island Tax Office to verify the appropriate forms for your County.
If I can research more information for you on this, or any property in Hawaii that you may be interested in, please contact me. I’d be happy to connect you with the information to assist you in knowing more about Hawaii home ownership and the Hawaii business culture.
Blessings and Aloha,
Claire K. Bajo, RS