Honolulu Property Tax – Fiscal Year 2023
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Honolulu property taxes may be an added cost of owning property in paradise, but this tax, which pays for our roads, parks, safety and more, is one of the lowest rates in the United States.
According to the Honolulu Department of Budget and Fiscal Services, Property Assessment Division, property taxes are a major source of revenue for police, fire, emergency services, water safety, parks, trash and other public services. Oahu island.
Property Tax Rates on Oahu (Honolulu County)
Residential property taxes on the island of Oahu, in which the entire island is known as Honolulu County, are divided into ten classes as of July 1, 2020:
- Residential (Class A)
- Residential A (Level 1 and 2) (Class I)
- Hotel and Resort (Class B)
- Commercial (Class C)
- Industrial (Class D)
- Agricultural (Class E)
- Conservation (Class F)
- Civil Service (Class G)
- Free Agriculture (Class H)
- Bed and Breakfast at Home (Class J)
Property taxes vary depending on the island or the county that governs the island. Maui, Kauai and Hawaii counties have different property tax rates.
If you live in a home or own a home that is rented to other people on the island of Oahu, you generally fall into one of the following four classes.
(1) Residential Property: 0.35% of assessed value (or $3.50 per $1,000 of net taxable property value) .
This rate, from July 1, 2021 through June 30, 2022 (FY 2021), applies to homes occupied by the owner as their primary residence and to homes with an assessed value of less than $1,000,000.
The homeowner’s exemption may be claimed if the home is the owner’s primary residence. This exemption gives a property tax rate of 0.35%, regardless of whether the house is worth $2,000,000 or $350,000, and also provides a significant exemption amount:
- The standard home exemption amount is $100,000 (previously $80,000).
- Ages 75 to 79: $140,000.
- Ages 80 to 84: $160,000.
- Ages 85 to 89: $180,000.
- 90 years and older: $200,000
You can prove that the home is your primary residence by filling out a form and providing proof that you are registered to vote in Honolulu, have filed an income tax return as a Hawaii resident, or have lived in the home for 270 days or more in each calendar year. .
Example Honolulu residential property tax rate:
The 45-year-old owner lives in the property with an assessed value of $1,600,000. Based on his age, he has a $100,000 tax exemption, so his estimated annual tax is $5,250. (($1,600,000 – $100,000) x 0.0035)
(2) Residential A: 0.45% of assessed value up to $1,000,000 (Tier 1) and 1.05% of assessed value over $1,000,000 (Tier 2).
The Honolulu residential property tax rate applies to properties where the owner does not claim a residential tax exemption and whose total assessed value exceeds $1,000,000.
Example of property tax rates in Honolulu:
The 50-year-old woman owns a $1,600,000 property as her second home on Oahu’s North Shore. Since this is her second home, she has no benefits. Estimated annual taxes up to $1,000,000 are $4,500 ($1,000,000 x 0.0045) and annual property taxes over $1,000,000 are $6,300 ($600,000 x 0.0045) 0105). So the total taxes on her second property are $10,800 per year ($6,300 + $4,500).
(3) Hotel and Resort: 1.39% of assessed value.
This tax applies to zoned hotels and resorts, as well as transient recreational facilities. Prior to fiscal year 2020, a hotel and resort tax could be levied on all short-term vacation rentals , such as rooms rented out on Airbnbs , but as of July 1, 2020, short-term vacation units will be subject to this existing hotel and resort tax class while While bed and breakfast establishments will have their own tax class (Class J). If you are not using your booked hotel and resort unit as a hotel, you can apply to have your property reclassified as residential.
Example of hotel and resort property tax rates:
The couple owns $1,600,000 worth of taxable property in a Waikiki condominium and rents it out to visitors every week. Estimated annual taxes are $21,264 ($1,600,000 x 0.0139).
(4) Bed and Breakfast Homes: 0.65% of assessed value.
This new property tax classification was created in December 2019 by Mayor Kirk Caldwell.
A bed and breakfast is defined as a rental of less than 30 days where the landlord or other operator is present during the stay. A typical B&B would be when someone rents out a room on Airbnb in their own home where they live. Short-term vacation rentals (TVR) are defined as “unhosted” or “whole house” rentals of less than 30 days when the owner or operator is away; TVRs are taxed in the hotel and resort class at a rate of 1.39%.
The Department of Planning and Permitting is expected to soon approve up to 1,700 new rentals on Oahu; however, as of April 6, 2021, the registration process has been suspended due to possible complications. Find out more about short term vacation rentals on Oahu and other islands here . This new bed and breakfast tax rate will be part of the City and County of Honolulu’s new clarifications and regulations regarding short-term vacation rentals, but only time will tell when more people will be charged this special rate.
“This next phase allows for 1,700 short-term rental units to be registered and authorized beginning in October 2020,” Caldwell said at a December 2019 press conference. pay a higher property tax rate than the residential category. We must not forget that those who offer their homes for short-term vacation rentals are doing business in our residential communities.”
Bed and Breakfast Property Tax Rate Example: A family owns taxable property valued at $900,000 in Kaneohe. They are lucky enough to be one of the houses that are allowed to provide short-term vacation rentals to visitors. They now rent out a room in their home on Airbnb, usually to single travelers. Estimated annual taxes are $5,850 ($900,000 x 0.0065).
Before they were classified as a bed and breakfast, they paid residential property taxes, which were $3,150. So they now pay $2,700 more in taxes each year because they rent a room on Airbnb and are classified as a legal bed and breakfast property.
In addition to these four Honolulu property tax rates, there are a number of other Oahu property tax rates:
- Commercial: 1.24%
- Industry: 1.24%
- Agriculture: 0.57%
- Conservation: 0.57%
- Civil service: 0%
- Free Agriculture: 0.85%
Estimated values
How is the assessed value of my home in Hawaii determined? For starters, the tax value of a home is different from the price a buyer will actually pay for it. To continue, no one typically visits your home to determine its appraised value.
Instead, the Honolulu Tax Assessor typically looks at five comparable properties sold before July 1 of that tax year. On October 1, the assessed value received by the assessor will be used to calculate the property taxes due for the next fiscal year (July 1 to June 30).
For a newly built home or apartment without a registered sale, an appraiser from Honolulu Real Estate Appraisal will estimate the construction cost, typically if the apartment project is less than 75% complete. If the project is 95% complete and comparable sales are available for a similar building, then the appraiser can use those comparable sales to determine the assessed value.
Estimates can be disputed, but make sure you have recently sold the data to support the claim. Properties for sale and market fluctuations do not affect the appraised value of a home. Evidence expedites appeals and includes a comparable fee simple market value, a contractor’s estimate for the repair of certain items, and other evidence showing that the assessed value exceeds the fee simple market value by more than 10 percent. Appeals can be submitted from December 15, 2021 to January 15, 2022.
Paying Oahu Property Taxes
In Honolulu County on the island of Oahu, taxes are paid in two equal installments during the fiscal year (July 1 to June 30).
The first payment is due August 20 (including taxes from July 1 to December 31) and this bill will be mailed in July. The second payment is due February 20 (including taxes from January 1 to June 30) and this bill is mailed in January.
If August 20 or February 20 falls on a weekend, Saturday or Sunday, then you have until the next business day to pay. Also, the property owner can pay the first property tax for the entire year; You do not have to wait to pay the amount shown on your February 20 invoice.
There are four ways to pay taxes to Honolulu County:
- Online: Go to www.hnlpay.com and pay by credit card (2.35% fee) or debit card (1% fee).
- Phone: Call 1-877-309-9117.
- Check: Send a check made out to “City & County of Honolulu” to City & County of Honolulu, Property Tax Collection Division, Treasurer’s Department, PO Box 4200, Honolulu, HI 96812.
- In person: Pay by cash or check by visiting City Hall on South King Street in Honolulu.
Make sure you pay on time as interest of 1% applies for each month your taxes are overdue. The City and County of Honolulu may also impose additional fines.
Property Tax Credit for Homeowners
In addition to the homeowner’s exemption, the City and County of Honolulu has offered a real estate tax credit to property owners who meet certain requirements:
- The housing exemption must be in effect at the time of application and for the tax year from July 1, 2021 to June 30, 2022.
- No title holder may own any other property elsewhere.
- The combined gross income of all title holders for the 2019 calendar year cannot exceed $60,000.
- The application cannot be fraudulent or violate city or county laws.
The tax credit is the difference between assessed real estate taxes and 3 percent of the title owners’ gross income.
Example of a person who qualifies for the property tax credit: Mr. and Mrs. Aloha have a combined income of $25,000 for 2019. Multiplying their total income by 3 percent = $750. Their 2020-2021 tax amount was $2,500-$750 = They will receive $1,750 in tax credit for the 2021-2022 tax year.
To apply for the property tax credit, applications must be received by September 30, 2020. It is unknown whether the City and County of Honolulu will extend this tax credit, but many homeowners will be grateful to receive the credit this tax year. especially as people recover from the COVID-19 pandemic.
Honolulu Property Taxes for New Homeowners
If you are a new homeowner living in this property, make sure you apply for the tax exemption. Additionally, it may take up to four months for a note to be addressed. The Honolulu Department of Taxation can be called at 808-768-3980 to update your tax bill mailing addresses.
Homeowners can also conveniently track their property taxes online . Honolulu’s property taxes help ensure the availability of roads, parks and other public services in our city and county, and it’s good to know that Paradise’s property taxes are relatively low compared to the mainland.