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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