Hawaii Property Taxes
Overview of Hawaii Property Taxes
Homeowners in Hawaii are required to pay property taxes every year. The taxes are administered and collected by county governments. Each year, the state and its local governments collect $17 billion in revenue. Of that, $1.7 billion comes from property taxes or 10.2% of total revenue. Hawaii is generally a low tax state, as indicated by the lower percentage of property taxes compared to the total revenue collected. In Hawaii, homeowners pay an average of 0.30% of their home value every year in property taxes or $2.96 for every $1,000 in home value. As a result, Hawaii property tax rates are some of the lowest in the country.
The average home value in Hawaii is $571,176, which is higher than in most states. However, the average Hawaii property tax bill adds up to $1,688, which is still much lower than the national average. The state of Hawaii offers lavish exemptions to principal residences, which is one of the reasons for the low property taxes. Exemptions can range from $80,000 to $160,000, depending on the county in which your property is located.
Every year, the tax office appraises homes in Hawaii are assessed to determine their assessed value. State laws require properties to be valued at 100% of their "fair market value," or the amount the property would sell for in the open market. The county officials use mass appraisal techniques to value many homes within their jurisdiction without physically visiting them. However, a physical visit becomes necessary if your home is new or has been recently remodeled. Homeowners in Hawaii receive an annual Notice of Assessment indicating their home's assessed value. The state allows you to appeal property taxes to your respective local tax board if you believe your home has been over-assessed.
To determine your Hawaii property tax bill, the taxing authority subtracts the applicable exemptions on your home's assessed value and then applies a tax rate on the difference. Hawaii property tax rates are listed per $1,000 in taxable value and vary from county to county. The tax rate in Honolulu County, for instance, is 3.5 per $1000 in home value. If your home has an assessed value of $350,000 and you qualify for a $100,000 exemption, your property tax bill in Honolulu will add up to (0.0035 x 250,000) $875.
If you are planning to buy a home in Hawaii and want to understand how much your property tax bill could potentially cost, check out our Hawaii Property Tax Tool to see what your bill would be.
Hawaii Property Tax Due Dates
Hawaii's fiscal year runs from July 1st of a given year to June 30th of the following year. But when are property taxes due in Hawaii? Homeowners in the state can pay their Hawaii property taxes in two installments. The first installment covers the July 1st-Dec 31st period and is due by August 20th. The tax bill is sent to homeowners in July. The second installment covers the January 1st-June 30th period and is due by February 20th. You receive this bill in January. If the due dates fall on a weekend or holiday, they are pushed to the next business day.
While Hawaii property taxes can be paid in two installments, the state does not restrict you from clearing the entire bill in a single payment. You can pay the entire annual tax bill as part of the first installment. Additionally, failure to receive a tax bill does not excuse you from paying Hawaii property taxes. You can pay your property taxes online, in cash, or via check. Property taxes that remain unpaid by Hawaii property tax due dates result in interest at a rate of 1% per month on the delinquent taxes. Additionally, a penalty of 2% for each month shall be added to the delinquent taxes. The interest and penalties become part of the Hawaii property tax and are collected as such.
Hawaii Property Tax Exemptions
Besides the option to appeal property taxes if wrongly assessed, the state of Hawaii offers several exemptions to eligible homeowners. They include homestead and senior exemptions. While the exemptions can reduce your tax bill, you are still required to comply with Hawaii property tax due dates.
Hawaii Homestead Exemption
Hawaii's homestead exemption is also known as the home exemption. It exempts $100,000 of your property's assessed value from Hawaii property taxes if you are under 65 years. For residents above 65 years, the exemption increases to $140,000. You are required to have lived in the state for 270 days of a calendar year to be eligible for this exemption. Also, you must be using the property as your primary residence.
Hawaii Senior Citizens Exemption
Hawaii's senior exemption exempts $120,000 of home value from property taxes for 65 or older residents. The amount increases to $140,000-$200,000 for low-income and senior residents 75 years or older. The exemption is subtracted from the home's value with Hawaii property taxes administered on the difference. The exemption only applies to principal residences.
Other Hawaii property tax exemptions include the disabled veteran's exemption, which exempts completely disabled veterans from all property taxes. The disability must be 100% from injuries sustained while serving in the U.S. Armed Forces. The unmarried widow/widower of the disabled veteran also benefits from this exemption. A copy of a physician's certificate of disability is required while applying for this exemption.
How to Appeal Your Property Taxes in Hawaii
Homeowners in Hawaii receive a Notice of Assessment every year detailing their home's assessed value, classification, and any exemptions. If you have reasons to disagree with the assessment, you can appeal your property taxes on or before January 15th, preceding the tax year. The first step is contacting your local assessor with your objections. This is an informal discussion where most misunderstandings should be cleared. If you disagree with the assessor, you can appeal to the county Board of Review. Decisions by the Board can be appealed to the Tax Appeal Court of the State of Hawaii.
The process of filing an assessment appeal varies across Hawaii though it generally follows the same steps from county to county:
- Obtain your assessment
- Determine if you are overassessed
- Complete forms needed to appeal
- File property tax appeal
- Prepare for hearing
- Attend hearing
- Appeal the decision
How to Appeal Your Property Taxes in Honolulu County
Obtain your assessment
If you own property in Honolulu County, you can obtain your assessment details from the Notice of Assessment. Alternatively, you can visit Honolulu's Real Property Assessment Division.
Determine if you are over-assessed
To successfully appeal property taxes, you must determine if the assessor overvalued your property for taxation purposes. TaxProper's search tool will help you search for similar properties within your location and see how their assessed values compare to your property.
Complete forms needed to appeal
File property tax appeal
Property tax appeals in Honolulu County should be filed with the Board of Review of the City and County of Honolulu. The appeal must be hand-delivered on or before January 15th, 4:30 p.m., to the address found on Honolulu's Real Property Assessment Division.
Prepare for hearing
By law, the Director of Budget and Fiscal Services is presumed to be correct, and the burden of proof lies with you as the appellant. You are required to provide sufficient evidence supporting your opinion of the assessment. This includes contractor estimates to repair damages and sales of properties with similar land areas, square feet of living areas, and other amenities.
You are not required to attend an appeal hearing in person, although encouraged. If you attend the hearing, you must have six copies of the information you wish to present for each board member and the County Appraiser. If you choose not to attend, you must submit your arguments and supporting evidence to the Board of Review at least one week before the hearing.
Appeal the decision
Decisions by the Board of Review of the City and County of Honolulu can be appealed to the Tax Appeal Court within 30 days of receiving the Board's decision.
Property Tax Information for Hawaii Counties
The table below provides county-level information about how property taxes work in each Hawaii county.
Want to learn more? Click the county links to learn more about a specific Hawaii county.