Property Management (808) 427-4855

The State of Hawaii recently released Real Property Tax Rates (Property Tax Rates) for the Fiscal Year 2020 – 2021.

The Property Tax Rates for Honolulu County (Oahu) are as follows:     

Tax Rate per $1,000 Net Taxable
Residential $3.50
Commercial $12.40
Industrial $12.40
Agricultural $5.70
Preservation $5.70
Hotel & Resort $13.90
Public Service $0.00
Vacant Agricultural $8.50
Residential A, Tier 1 $4.50
Residential A, Tier 2 $10.50
Bed & Breakfast Home $6.50

What does this mean and how do you calculate property taxes? Find the assessed value of the home / property and divide that figure by 1,000. Then multiply that number by the Tax Rate and this would give you the approximate tax rate.   
Another way to look at it would be to divide the Tax Rate by 1,000 and turning it into a percentage. Example: the Residential Tax Rate of $3.50 divided by 1,000 becomes .0035 or .35% which could then be multiplied by the assessed value of the property.  Let’s look at a couple of examples.  The median Single Family Home Sale Price in May, 2020 was $800,000. Multiplying $800,000 x .35% (the Residential rate) = $2,800 in Annual Property Tax.  If you were looking at Agricultural Land that was assessed for the same value the Annual Property Tax would look more like: $800,000 x .57% (the Agricultural Rate) = $4,560.

I find the Residential A classification interesting. Residential A is essentially a home that an investor might own, or a second home. It is a residential property that does not have a Home Exemption, meaning it is not the owner’s primary residence.  Someone who owns a residential investment property that is assessed at the same $800,000 as in the example above, the Annual Property tax would look like: $800,000 x .45% (the Residential A, Tier 1 rate) = $3,600 which is $800 more than the base Residential Rate.  What happens if the assessed value of that same property goes up over $1,000,000?  That’s when it falls into the Residential A, Tier 2 category and the tax rate goes from .45% to 1.05%.  So if the assessed value of this property should go to $1,000,500 the Annual Property Taxes would go up to: $1,000,500 x 1.05% (the Residential A, Tier 2 rate) = $10,505.25

To recap, the Residential Property Tax Rates for Oahu are: the Tax Rate for your primary residence is 0.35% of the assessed value. If it is an investment property or second home valued at less than $1,000,000 the Tax Rate is 0.45% and if the property is an investment or second home valued at over $1,000,000 the Tax Rate is 1.05% of the assessed value.  Perhaps a good thing is that Residential Rates did not increase. It appears the only Tax Rate that increased was the Hotel & Resort classification, which went from 1.24% to 1.29%.

I placed links below to the Real Property Tax Rates table as well a detailed Residential A Classification explanation from the State.

Real Property Tax Rates in Hawaii

Residential A Classification

Disclaimer: The author of this Blog is a Realtor, not a CPA nor Tax Advisor. Although I wrote this information as accurately as I could it is possible mistakes were made in the interpretation of the facts or in calculations. Therefore do not rely on this information to make purchase decisions but instead consult a tax, accounting or legal professional for advice.