Tax

Real Estate Taxes in Hawaii

It’s a pretty well-known fact that the cost of living in Hawaii is higher than most of the other 49 states. A question I am often asked is, “how are the taxes?” Most people assume because you have to pay to play here in paradise that the real estate taxes are astronomical. Actually, it’s not as bad as you might expect. It also depends on who you are, what type of property you own, as well as which county you live in.

Real Estate Property Taxes by State

The following is table from 2016 tax rates by state. It provides median home values by state (they’ve since gone up a bit in Hawaii), as well as estimated annual taxes by state. The rate in recent years has gone up to 28% in Hawaii, so one could expect to pay about $1400-$1500 in property taxes per year for the average home in Hawaii. More recent data is available for county by county tax rates in Hawaii, for the 2017-2018 fiscal year (see table, below). Overall, you’ll see that Honolulu County offers the lowest rates.

Rank

State

Effective Real-Estate Tax Rate

Annual Taxes on $179K Home*

State Median Home Value

Annual Taxes on Home Priced at State Median Value

1 Hawaii 0.27% $487 $515,300 $1,406
2 Alabama 0.43% $773 $125,500 $543
3 Louisiana 0.49% $876 $144,100 $707
4 Delaware 0.54% $959 $231,500 $1,243
5 District of Columbia 0.56% $1,000 $475,800 $2,665
6 South Carolina 0.57% $1,019 $139,900 $798
7 West Virginia 0.58% $1,044 $103,800 $607
8 Colorado 0.60% $1,073 $247,800 $1,489
9 Wyoming 0.61% $1,097 $194,800 $1,196
10 Arkansas 0.62% $1,111 $111,400 $693
11 Utah 0.68% $1,218 $215,900 $1,472
12 New Mexico 0.74% $1,324 $160,300 $1,188
13 Tennessee 0.75% $1,335 $142,100 $1,062
14 Idaho 0.76% $1,366 $162,900 $1,246
15 Mississippi 0.79% $1,408 $103,100 $813
16 Virginia 0.80% $1,420 $245,000 $1,948
T-17 California 0.81% $1,438 $385,500 $3,104
T-17 Arizona 0.81% $1,446 $167,500 $1,356
T-19 Montana 0.85% $1,525 $193,500 $1,652
T-19 Kentucky 0.85% $1,511 $123,200 $1,042
T-19 North Carolina 0.85% $1,524 $154,900 $1,322
T-19 Nevada 0.85% $1,523 $173,700 $1,481
23 Indiana 0.87% $1,560 $124,200 $1,085
24 Oklahoma 0.88% $1,569 $117,900 $1,036
25 Georgia 0.94% $1,685 $148,100 $1,397
26 Missouri 1.00% $1,790 $138,400 $1,387
27 Florida 1.06% $1,894 $159,000 $1,686
T-28 Oregon 1.08% $1,929 $237,300 $2,563
T-28 Washington 1.08% $1,931 $259,500 $2,805
30 Maryland 1.10% $1,956 $286,900 $3,142
31 North Dakota 1.12% $2,000 $153,800 $1,722
T-32 Alaska 1.18% $2,112 $250,000 $2,956
T-32 Minnesota 1.18% $2,110 $186,200 $2,200
34 Massachusetts 1.20% $2,139 $333,100 $3,989
35 Maine 1.30% $2,321 $173,800 $2,259
36 South Dakota 1.34% $2,389 $140,500 $1,879
37 Kansas 1.40% $2,502 $132,000 $1,849
38 Iowa 1.48% $2,649 $129,200 $1,916
39 Pennsylvania 1.53% $2,725 $166,000 $2,533
40 Ohio 1.56% $2,794 $129,900 $2,032
41 New York 1.62% $2,899 $283,400 $4,600
42 Rhode Island 1.63% $2,915 $238,000 $3,884
43 Vermont 1.74% $3,116 $217,500 $3,795
44 Michigan 1.78% $3,172 $122,400 $2,174
45 Nebraska 1.85% $3,308 $133,200 $2,467
46 Texas 1.90% $3,386 $136,000 $2,578
47 Wisconsin 1.96% $3,499 $165,800 $3,248
48 Connecticut 1.97% $3,517 $270,500 $5,327
49 New Hampshire 2.15% $3,838 $237,300 $5,100
50 Illinois 2.30% $4,105 $173,800 $3,995
51 New Jersey 2.35% $4,189 $315,900 $7,410

Source: Wallethub.com
*$178,600 is the median home value in the U.S. as of 2015, the year of the most recent available data.

Who

Full-time residents of the state are taxed at a lower rate on their primary residence. Compared to the rate on second homes this may be almost half the amount. Residents also get exemptions (lowering the taxable value) for their primary residence as well as a lower tax rate. Senior citizens and people with disabilities are given additional exemptions.

What

Different properties are taxed at different rates. The highest tax rate in the state is for timeshares in Maui County ($15.43/ $1000 taxable value). The lowest rates for homeowners are in Maui County ( $2.86/$1000 taxable value).  If you are buying vacant land and are not ready to build, check to see if it is zoned as Agricultural. If you use it for grazing or another agricultural purpose you may be eligible for a Non-Dedicated Agricultural Use exemption.

Where

Hawaii consists of 4 counties. Maui County includes the islands of Lanai and Molokai. Each county has slightly different ways of describing real property, as well as different tax rates for each type.

While the purchase price of land, condominiums, and homes may be a bit higher in Hawaii, the tax burden is not as burdensome as some other states in the union. Owning property may not be as unreachable as you may think.  If you have questions about Hawaii real estate, please contact me.

2017/2018 Real Property Tax Rates

County Class Taxable bldg per/$1000 Taxable land per/$1000
HAWAII * Affordable Renting Housing $6.15 $6.15
Agricultural/Native Forests $9.35 $9.35
Apartment $11.70 $11.70
Commercial $10.70 $10.70
Conservation $11.55 $11.55
Homeowner $6.15 $6.15
Hotel/Resort $11.55 $11.55
Industrial $10.70 $10.70
Residential $11.10 $11.10

 

HONOLULU ** Agricultural $5.70 $5.70
Agricultural Vacant $8.50 $8.50
Commercial $12.40 $12.40
Hotel/Resort $12.90 $12.90
Industrial $12.40 $12.40
Preservation $5.70 $5.70
Public Service $0.00 $0.00
Residential $3.50 $3.50
Residential A (>$1M) $4.50 $4.50
Residential A ($1M<) $9.00 $9.00

 

KAUAI Agricultural $6.75 $6.75
Commercial $8.10 $8.10
Commercial Residential $5.05 $5.05
Conservation $6.75 $6.75
Homestead $3.05 $3.05
Hotel/Resort $10.85 $10.85
Industrial $8.10 $8.10
Residential $6.05 $6.05
Residential Investor $7.05 $7.05
Vacation Rental $8.85 $8.85

 

MAUI *** Agricultural $6.01 $6.01
Apartment $6.32 $6.32
Commercial $7.28 $7.28
Commercial Residential $4.56 $4.56
Conservation $6.37 $6.37
Homeowner $2.86 $2.86
Hotel/Resort $9.37 $9.37
Industrial $7.49 $7.49
Residential $5.54 $5.54
Time Share $15.43 $15.43

Source: LREHawaii.com, a Hawaii Life Real Estate Brokers team.

* Hawaii County applies to the Big Island.
** Honolulu County applies to the island of Oahu.
*** Maui County applies to the islands of Lanai, Maui and Molokai.

Hawaii real property tax rates are for the fiscal year 2017-2018. The 1st installment payment of property taxes is due on August 20 and is for the tax period from July 1 to December 31. The 2nd installment payment due on February 20 is for the tax period from January 1 to June 30.

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