Nothing much changed from last year, with respect to the Honolulu County (aka Oahu) Property Tax Rates charged to residential property owners. (See Resolution 22-45, adopted 6/1/2022 by the Honolulu County City Council). Particularly, one great thing that did not change is that Hawaii real property tax rates fare, overall, the lowest in the United States.
Home Exemption Stays Constant
The amounts of an owner-occupant Home Exemption also stayed constant. The general exemption remained at $100,000. In addition, the tax exemption for owner-occupant seniors, over age 65 remained steady at $140,000.
How The Owner-Occupant Home Exemption Works
To be eligible for a home exemption you and your property must meet the following criteria:
(1) You own and occupy the property as your principal home (the dwelling
where you live most of the year or more than 270 calendar days per
(2) Ownership of the property is duly recorded at the Bureau of
Conveyances or duly filed in the office of the assistant registrar of
land court if the property is registered in land court pursuant to HRS
Ch. 501, on or before September 30th;
(3) In the case of a lease, the lease of the parcel has a term of five (5)
years or more, used for residential purposes as the lessee’s principal
home, the lease and any extension, renewal, assignment or agreement
to assign the lease is duly recorded at the Bureau or duly filed in the
office of the assistant registrar of land court if the property is
registered in land court, the lessee agreed under the lease to pay all
real property taxes during the term of the lease, by September 30th; and
(4) You file a claim for home exemption with the Real Property
Assessment Division on or before September 30th preceding the tax
year for which you claim exemption.
** A separate exemption claim should be submitted for each owner occupant
If you are eligible for a home exemption, the amount of your exemption is deducted from the total assessed value of the land plus improvements. This leaves you with a figure called “net taxable value” upon which your Oahu real property taxes are calculated.
Oahu Real Property Tax Rates for 2022 and 2023 Fiscal Year
There no substantive changes to the real property tax rates, themselves, over those charged in the 2021-2022 FY.
Here are all of the categories and the applicable rates:
|HONOLULU COUNTY OAHU PROPERTY TAX RATES|
July 2022-June 2023
(Amount of Tax Per $1000 of Net Taxable Value)
|Hotel and Resort (B)||$13.90|
|Public Service (G)||$0.00|
|Vacant Agricultural (H)||$8.50|
|Residential A – Tier 1 (I)|
(Applied to the net taxable value of the property up to $1,000,000)
|Residential A – Tier 2|
(Applied to the net taxable value of the property in excess of $1,000,000)
|Bed & Breakfast Home (J)||$6.50|
Calculating Oahu Property Tax Rates for RES-A Properties
Residential A properties use a tiered tax calculation. The first $1 million of net assessed value is calculated at one rate and the remainder at another. Here is how it works:
Honolulu Harry owns a Property A in Honolulu County (Oahu) with a net tax assessed value of $1,400,000, and rents Property A out to a long-term tenant. He lives in another home, Property B, on Oahu and takes a home exemption for that property. Since he resides in another home and rents Property A, he is not eligible for a home exemption on Property A.
Harry’s property is a Residential A property (see below). The Oahu property tax rate for the first $1,000,000 of net taxable value (Residential A – Tier 1) is $4.50 per $1,000, so the tax on that portion of Property A is $4,500. The Oahu property tax rate on the next $400,000 (Residential A -Tier 2) is $10.50 per $1,000, so the tax on the second portion of the value is $4,200. Adding those two figures together, the total annual property tax on this Residential A property would be $8,700.
However, If Honolulu Harry resided in Property A (and had applied for and received his owner exemption of $100,000), her total tax on Property A would be $3.50 per $1000 ($3.50 x $1,300,000 /$1,000), for a total annual property tax of $4,550.
Which Properties are Residential A (or RES-A)?
Residential A properties are certain properties on Oahu that are without an owner-occupant home exemption. These are:
- Condominium units without home exemption.
- Residential lots zoned R-3.5, R-5, R-7.5, R-10, R-20, with either one or two single family homes, without home exemption.
- Residential vacant lots zoned R-3.5, R-5, R-7.5, R-10 and R-20.
As you can see from the Honolulu Harry example above, Oahu property tax rates for 2022-2023 are significantly higher for Residential A properties than they are for similarly valued owner-occupied properties.
If you have other questions regarding purchasing Oahu real estate, please contact Yvonne at 808.721.8088. ~ Aloha