Understanding Oahu’s Property Taxes
The Honolulu County Property Tax may be an added cost of owning real estate in paradise. But this tax that contributes to our roads, parks, safety, and more is one of the lowest rates in the United States.
Property Tax Rates on Oahu (Honolulu County)
The residential real estate tax on Oahu, in which the whole island is known as Honolulu County, is classified into three categories: Residential, Residential A (Tier 1 and 2), and Hotel & Resort.
(1) Residential: 0.35% of assessed value.
This July 1, 2019 through June 30, 2020 (fiscal year 2019) rate applies to homes where the owner lives as their primary residence and to homes with an assessed value of less than $1,000,000.
A homeowner's exemption can be claimed if the home is the owner’s primary residence. This exemption gives the 0.35% property tax rate whether the home is worth $2,000,000 or $350,000 – and also gives a sizable exemption amount:
- The standard home exemption amount is $100K (formerly $80K).
- 75 to 79 years of age: $140,000
- 80 to 84 years of age: $160,000
- 85 to 89 years of age: $180,000
- 90 years of age and over: $200,000
You may prove that the home is your primary residence by filling out a form and showing evidence that you are registered to vote in Honolulu, file an income tax return as a State of Hawaii resident, or occupy the home 270 days or more each calendar year.
An example of the Honolulu Residential property tax rate:
A 45-year-old owner lives in a property with an assessed value of $1,600,000. According to his age, he has a $100,000 exemption, so his estimated yearly taxes are $5,250. (($1,600,000-$100,000) x 0.0035)
(2) Residential A: 0.45% of assessed value up to $1,000,000 and 1.05% of the assessed value above $1,000,000.
The Residential A Honolulu Property Tax Rate applies to properties where an owner doesn’t claim the home exemption and the total assessed value is more than $1,000,000.
An example of the Honolulu Residential A property tax rate:
A 50-year-old woman has a $1,600,000 property as her second home on the North Shore of Oahu. Since this is her second home, she does not have an exemption. The estimated annual taxes up to $1,000,000 are $4,500 ($1,000,000 x 0.0045), and the yearly property taxes above $1,000,000 are $6,300 ($600,000 x 0.0105). Therefore the total taxes for her second property are $10,800 per year ($6,300 + $4,500).
(3) Hotel & Resort: 1.39% of assessed value.
This tax is imposed on people who own short-term vacation rentals (which are zoned as Hotel & Resort). If you are not using a Hotel & Resort classified condo for short-term vacation rentals, you can apply to have your property reclassified to residential.
An example of the Hotel & Resort property tax rate:
A couple owns a $1,600,000 tax-assessed property in a Waikiki condo and rents it out every week to visitors. The estimated annual taxes are $21,264 ($1,600,000 x 0.0139).
In addition to these three residential Honolulu property tax rates, there are a number of other Oahu property tax rates:
- Commercial: 1.24%
- Industrial: 1.24%
- Agricultural: 0.57%
- Preservation: 0.57%
- Public Service: 0%
- Vacant Agricultural: 0.85%
How is the assessed value of my Hawaii home determined? To start, the tax assessed value of a home is different from the price a buyer will actually pay for it. To continue, no one typically visits your home to determine its assessed value.
Instead, an appraiser from the Honolulu tax office will typically analyze five comparable properties sold prior to July 1 of that tax year. On October 1, the assessed value from the appraiser will be used to calculate property taxes due the following fiscal year (July 1 to June 30).
For a newly constructed home or condo without a recorded sale, the appraiser from the Honolulu Real Property Assessment Division will calculate building costs, typically if the condo building project is less than 75% complete. If the project is 95% complete and comparable sales are available from a similar building, then the appraiser may use those comparable sales to determine an appraised value.
Assessed values can be contested – but be sure you have recently sold data to back up a claim. Properties listed for sale and market swings do not affect appraised home values. Appeals can be filed from December 15 to January 15 on this site.
Paying Oahu Property Taxes
In Honolulu County, on the island of Oahu, taxes are due in two equal installments throughout the fiscal year (July 1 to June 30).
The first installment is due on August 20 (includes taxes from July 1 to December 31), and this bill will be mailed in July. The second installment is due on February 20 (includes taxes from January 1 to June 30), and this bill is mailed in January.
If August 20 or February 20 is a holiday, Saturday, or Sunday, then you have until the next business day to pay. Also, a property owner may pay for the entire year at the first property tax bill; you don’t have to wait to pay the amount in the February 20 bill.
There are four ways to pay your taxes to Honolulu County:
- Online: Go to www.hnlpay.com and pay with a credit card (2.35% fee) or debit card (1% fee).
- Phone: Call 1-877-309-9117.
- Check: Mail a check made out to “City & County of Honolulu” to City & County of Honolulu, Real Property Tax Collection, Division of Treasury, P.O. Box 4200, Honolulu, HI 96812
- In Person: Pay with cash or check by visiting the City Hall on South King Street in Honolulu.
Make sure you pay on time, as interest at a rate of 1% is applied for each month of delinquent taxes. Honolulu City & County may also charge additional penalties.
Honolulu Property Taxes for New Homeowners
If you are a new homeowner living on the property, assure you file your tax exemption. Also, note address changes may take up to four months. The Honolulu Tax Department can be reached at 808-768-3980 to update tax bill mailing addresses.
Homeowners can also conveniently track their property taxes online. Paying Honolulu property taxes helps to assure our City & County roads, parks, and other public services are available – and it’s nice to know the paradise tax on property is relatively low compared to the Mainland.