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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!

Tax Rates 2011

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
808.756.4874

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Kathy Awai, R(S)

July 7, 2011

Claire,

I agree, Title Guaranty is the Best! I have used them for years and they have always helped me and my clients in every imaginable scenario. Regarding exemptions and taxes, I walked into a real estate office to hand another agent some documents and I had knew he owned an expensive home that is currently being sold. It is his primary residence and he had no clue about taking an exemption. His taxes currently are over $10,000 per year so I suggested he call his tax person immediately as well as the tax office, just in case his property did not sell, at least he could try and fix that situation….oh boy. It is very important to let our clients know that if they are living in their property and that is their primary residence, they need to file for an exemption which can reduce the amount of taxes you may pay on your property.

Kathy Awai, R(S)

July 7, 2011

Claire,

I agree, Title Guaranty is the Best! I have used them for years and they have always helped me and my clients in every imaginable scenario. Regarding exemptions and taxes, I walked into a real estate office to hand another agent some documents and I had knew he owned an expensive home that is currently being sold. It is his primary residence and he had no clue about taking an exemption. His taxes currently are over $10,000 per year so I suggested he call his tax person immediately as well as the tax office, just in case his property did not sell, at least he could try and fix that situation….oh boy. It is very important to let our clients know that if they are living in their property and that is their primary residence, they need to file for an exemption which can reduce the amount of taxes you may pay on your property.

Claire K. Bajo RS

July 8, 2011

Thank You Kathy, I totally agree! A Home Owner’s Exemption can cut real property taxes significantly when it comes to Owner-Occupants who will be living in the property as Primary Residents.

And Title Guaranty has provided awesome services to Sellers, Buyers and people needing Refinance or recording documents with the Bureau of Conveyance. I look forward to closing more escrows with them!

Claire K. Bajo RS

July 8, 2011

Thank You Kathy, I totally agree! A Home Owner’s Exemption can cut real property taxes significantly when it comes to Owner-Occupants who will be living in the property as Primary Residents.

And Title Guaranty has provided awesome services to Sellers, Buyers and people needing Refinance or recording documents with the Bureau of Conveyance. I look forward to closing more escrows with them!

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MILO MAGNO

August 31, 2016

I closed and recorded June 21 2016, I just did my home exemption form, will I be able to claim it this coming tax season (APR 2017 deadline)? If not, will this years 6 months roll over into the next year? I ask the main question because I noticed a date for June 30th being a close before date. Is there an addendum with my escrow closing documents I can send in?

MILO MAGNO

August 31, 2016

I closed and recorded June 21 2016, I just did my home exemption form, will I be able to claim it this coming tax season (APR 2017 deadline)? If not, will this years 6 months roll over into the next year? I ask the main question because I noticed a date for June 30th being a close before date. Is there an addendum with my escrow closing documents I can send in?

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