Hawaii Property Taxes 2025-26: Rates, Exemptions & Examples

Hawaii’s Unique Property Tax Structure

Why Hawaii Has the Lowest Average Property Taxes in the U.S.

According to national studies, Hawaii’s effective property tax rate hovers around 0.27%, the lowest in the country. Compare that to states like New Jersey or Illinois, where rates often exceed 2%. Hawaii’s system is designed this way partly to encourage homeownership and partly because the state relies more heavily on income tax and tourism-related revenue.

How Property Taxes Are Calculated

Formula:
Property Tax = (Assessed Value ÷ 1,000) × Rate

Each county determines your assessed value annually, based on market conditions. That value is then multiplied by the tax rate set for your property’s classification.

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Property Tax Rates by Island (FY 2024–2025, effective July 1, 2024 – June 30, 2025)

Oahu (City & County of Honolulu)

• Residential (Owner-Occupied):

  • Tier 1 (≤ $1M): $1.80

  • Tier 2 ($1M–$3M): $2.00

  • Tier 3 (>$3M): $3.25

• Residential A (Non-Owner-Occupied/Second Homes):

  • Tier 1 (≤ $1M): $4.00

  • Tier 2 ($1M–$3M): $10.50

  • Tier 3 (>$3M): $11.40

• Hotel/Resort: $11.75

• Commercial/Industrial: $12.40

• Bed & Breakfast (legal, owner-occupied): $6.50

Maui County (Maui, Molokaʻi, Lānaʻi)

• Owner-Occupied:

  • Tier 1 (≤ $1M): $1.80

  • Tier 2 ($1M–$3M): $2.00

  • Tier 3 (>$3M): $3.25

• Long-Term Rental: $3.00 / $5.00 / $8.00 (tiers by value)

• Non-Owner Occupied: $5.87 / $8.50 / $14.00 (tiers by value)

• Short-Term Rental: $12.50 / $13.50 / $15.00 (tiers by value)

• Hotel/Resort: $12.40

Hawaiʻi County (Big Island)

• Homeowner (Owner-Occupied): $5.95

• Residential (Non-Owner-Occupied):

  • Tier 1 (≤ $2M): $11.10

  • Tier 2 (>$2M): $13.60

• Apartment: $11.70

• Hotel/Resort: $11.55

• Agricultural: $9.35

• Commercial/Industrial: $11–12 range

Kauaʻi County

• Owner-Occupied (Homestead): $2.59

• Residential (Non-Owner-Occupied):

  • Tier 1 (≤ $1.3M): $5.45

  • Tier 2 ($1.3M–$2M): $6.05

  • Tier 3 (>$2M): $9.40

• Vacation Rental:

  • Tier 1 (≤ $1M): $11.30

  • Tier 2 ($1M–$2.5M): $11.75

  • Tier 3 (>$2.5M): $12.20

• Hotel/Resort: $11.75

Understanding Property Classes

Residential vs. Residential A (Oahu):
“Residential” applies to owner-occupied homes that qualify for the homeowner exemption. “Residential A” applies to non-owner-occupied homes or second homes above $1M, with much higher rates.

Hotel/Resort, Commercial, Agricultural:
Counties use higher rates for income-producing properties. Resort and vacation rental classifications are taxed heavily, reflecting their ties to tourism.

Homeowner Exemptions

• Oahu: $100,000 off assessed value ($140,000 if 65+)

• Maui: $300,000 exemption for owner-occupants

• Big Island: $50,000 exemption

• Kauaʻi: $160,000 exemption

Most counties also increase exemptions for seniors (60–70+), and some offer special categories for disabled veterans, low-income homeowners, or conservation land.

Examples of Property Tax Calculations

Oahu Condo Example

• Condo in Kaka‘ako assessed at $800,000

• Rate: Residential Tier 1 ($1.80)

• Tax = (800 × 1.80) = $1,440 per year

Maui Resort Condo Example

• Condo in Wailea assessed at $1,200,000

• Rate: Non-Owner Occupied Tier 2 ($8.50)

• Tax = (1,200 × 8.50) = $10,200 per year

Big Island Single-Family Home Example

• Home in Kona assessed at $600,000

• Exemption: $50,000 → taxable value = $550,000

• Rate: Homeowner ($5.95)

• Tax = (550 × 5.95) = $3,272.50 per year

How Property Assessments Work

• Annual reassessments: Counties reassess each year based on market conditions.

• Appeals process: If you think your assessment is too high, you can file an appeal (deadlines are usually in January).

Additional Fees and Surcharges

• Special Improvement Districts: Certain neighborhoods (like Waikīkī) add extra charges for lighting, security, etc.

• Tiered rates: Luxury or investment properties may fall into higher tax brackets.

Property Taxes for Non-Residents

Non-resident owners typically pay higher rates. For example: Oahu’s “Residential A” and Maui’s “Non-Owner Occupied” classes. These policies are designed to keep housing more affordable for local residents.

How Hawaii Property Taxes Compare to Mainland States

Even in luxury areas like Waikīkī or Wailea, Hawaii’s property taxes are a fraction of what owners would pay in California, New York, or New Jersey. That’s one reason many mainland buyers find Hawaii attractive despite higher purchase prices.

Tips for Homeowners: Planning for Property Taxes

• Apply for exemptions early.

• Budget for reassessments.

• Compare across islands — Big Island looks cheapest at first glance, but classes/rates vary widely.

FAQs: Hawaii Property Taxes 2025–26

• When are taxes due? Twice a year (typically August & February).

• Can I pay online? Yes, each county has a payment portal.

• Military exemptions? Active-duty military often qualify for homeowner exemptions.

• Will rates rise after 2025? Counties reset annually; increases are possible.

• Can taxes be escrowed with my mortgage? Yes, most lenders allow this.

Conclusion: Budgeting for Hawaii Property Ownership

Hawaii’s property taxes may be the lowest in the nation, but the details matter. Rates differ by island, property class, and residency status. Knowing what exemptions you qualify for—and checking how your property is assessed—can save you thousands each year. Whether you’re buying a Waikīkī condo, a Wailea resort property, or a Kona single-family home, understanding Hawaii property tax rates for 2025–26 will help you plan with confidence.

Note: Tax rates change annually, effective each July 1. Always check the official county real property tax office for the most up-to-date numbers.

External Resource Reference

For official tax rates and exemption details, visit the Hawaii State Department of Taxation: https://tax.hawaii.gov

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