What You Need to Know About Hawaii’s New Property Tax Rates for 2019 – 2020

While Hawaii’s real property tax rate for owner-occupants remains one of the lowest in the United States, a few changes have taken place in regard to property taxes in Oahu. Understanding these changes and how they might affect you is important as you consider buying and selling real estate in Hawaii. 

Changes to the Home Exemption

One of the changes to property taxes in Oahu was an increase in homeowner exemptions. This is good news for many homeowners, as the general exemption was increased from $80,000 to $100,000. The tax exemption for owner-occupants over 65 years of age was also increased from $120,000 to $140,000.

If you are eligible to receive this exemption, the amount is deducted from the total assessed value of your land plus any improvements that you made. The resulting figure is your “net taxable value,” which is then used to calculate your property taxes. With a $20,000 increase to the exemption, it translates to about $70 in annual savings. 

Changes to Property Tax Rates

Significant changes have also been made to the actual rates of property taxes. Hotel and resort zoned properties, for example, have increased from $12.90 to $13.90. While this change impacts a relatively small number of residential properties, the changes to the Tier 2 Residential rate will have a greater impact on more people. This change increased the rate from $9.00 to $10.50 per $1,000 of net taxable value over $1,000,000.

Changes to Residential Rate A Guidelines

Some changes have also been made to how Residential A properties are taxed. Also referred to as simply RES-A, Residential A properties are those that are without an owner-occupant home exemption. These include condo units and residential lots zoned R-3.5, R-5, R-7.5, R-10, R-20 with either one or two single-family homes without a home exemption as well residential vacant lots zoned R-3.5, R-5, R-7.5, R-10 and R-20. 

For properties that fall under the Residential Rate A guidelines with an assessed value of $1 million or more, the assessed value above $1 million will be taxed at a rate of $10.50 per $1,000 assessed a value. Therefore, if you own a residential property on Oahu other than your principal residence with a tax assessed value of less than $1 million, your property tax rate will remain $3.50. If it has a tax assessed value of more than $1 million, your property tax rate will be blended with a tax rate of $4.50 for the assessed value up to $1 million plus $10.50 for the portion of the assessed value that is over $1 million. 

If you believe you are eligible as an owner occupant, you can claim your Home Exemption all the way up until September 30, 2019. You can only make this claim, however, if the property is your primary residence. If you are able to get this exemption, your property tax rate may be dropped to as little as $3.50 per $1,000 starting in July of 2020. 

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