Guide to Honolulu Property Taxes: Rates, Payments, Penalties & More

This is a comprehensive guide to Honolulu County (Oahu) property taxes for residential properties. It covers the current tax year – fiscal year 2022 – which runs from July 1, 2022 through June 30, 2023. We will refer to “Honolulu” in the following, but, understand, it applies to the entire County of Honolulu – all of Oahu.

In addition to a detailed overview on the residential property tax rates in Honolulu, you will also find valuable information on:

• Property Taxes Due Dates.
• How to Pay Property Taxes.
• How Is Assessed Value Determined.
• How to Contest Assessed Value.
• What are Penalties for Late Property Tax Payment.
• How to Reclassify a Property.
• Good to Know for New Property Owners.

4 Residential Tax Rates in Honolulu

1) Residential Tax Rate: 0.35% of Assessed Value.
Applies to properties where an owner claims the home exemption (owner’s primary residence), irrespective of the assessed value and also applies to properties where an owner cannot claim the home exemption (not the owner’s primary residence) where the assessed value is less than $1,000,000. Short-term rentals are not allowed.

An owner can only claim the home exemption if it is the owner’s primary residence. Proof of primary residence may be satisfied by showing evidence the owner is registered to vote in Honolulu, is filing income tax return as a resident of the State of Hawaii or occupies the home 270 days or more per calendar year. An owner who successfully claim the home exemption benefit from a $100,000 exemption (if less than 65 years of age), which means $100,000 is deducted from the assessed value and the owner’s property taxes are calculated based on the balance.

Home Exemption Based on Age:
a) Less than 65: $100,000.
b) 65 and above: $140,000.

Example
Owner’s age: 45.
Home Exemption Claimed: Yes (primary residence).
Exemption: $100,000.
Assessed Value: $1,600,000.
Taxable Amount: $1,500,000 ($1,600,000 – $100,000).
Property Taxes = $5,250 / year ($1,500,000 x 0.0035).

2) Residential A Tax Rate (two tiered): 0.45% of Assessed Value up to $1,000,000 and 1.05% of Assessed Value above $1,000,000.
Applies to properties where an owner does not claim the home exemption and the total assessed value is $1,000,000 or greater. Short-term rentals are not allowed.

Example
Owner’s age: 45.
Home Exemption Claimed: No (2nd home / investment property).
Assessed Value: $1,600,000.
Property Taxes on Assessed Value up to $1,000,000 = $4,500 / year ($1,000,000 x 0.0045).
Property Taxes on Assessed Value Above $1,000,000 = $6,300 / year ((1,600,000 – $1,000,000) x 0.0105).
Total Property Taxes = $10,800 / year ($4,500 + $6,300).

3) Hotel & Resort Tax Rate: 1.39% of Assessed Value.
Applies to properties that allow an owner to run short-term rentals, less than 30 days per tenant (learn more about properties that allow short-term rentals).

Example
Assessed Value = $1,600,000.
Property Taxes = $21,264 / year ($1,600,000 x 0.0139).

4) Bed & Breakfast Home: 0.65% of assessed value.
This is a new property tax category, which has been put on hold for now. Plans were to issue more Bed & Breakfast permits for owner occupants (not available for investors or 2nd home owners) who would be allowed to rent out part of their home on a short-term rental basis, less than 30 days per tenant.

Property Taxes Due Dates in Honolulu

The fiscal year for property taxes in Honolulu runs from July 1 of a given year to June 30 of the following year and property taxes are due in 2 even installments:

1st Installment
Due August 20 (covers property taxes for July 1 – Dec 31).
The bill will be mailed to owners in July.

2nd Installment
Due February 20 (covers property taxes for January 1 – June 30).
The bill will be mailed to owners in January.

Note 1: If Aug 20 or Feb 20 fall on a holiday, Saturday or Sunday, then the payment deadline is extended to the next business day.

Note 2: An owner may pay the entire 1 year property tax bill as part of the 1st installment in August or any time prior to the 2nd installment deadline in February. There is no requirement an owner must pay property in 2 installments.

How to Pay Property Taxes in Honolulu

There are 4 ways to pay property taxes in Honolulu:

1) Online: www.hnlpay.com. There is a 2.70% fee for Discover, Visa or MasterCard credit cards and a 1.15% fee for Debit cards.
2) Phone: Call 1 (877) 309-9117.
3) Check: Issue a check to “City & County of Honolulu” and mail it to City & County of Honolulu, Real Property Tax Collection, Division of Treasury, PO Box 4200, Honolulu, HI 96812 (verify before mailing).
4) In Person (not available since covid-19): Pay in cash or with a check by visiting City Hall, Division of Treasury, 530 South King St #115, Honolulu, HI 96813. Hours: Monday – Friday (except holidays) 7:50am – 4:15pm.

How is Assessed Value Determined in Honolulu

Property tax amounts in Honolulu are based on assessed value, which is a value the tax office’s appraisal team determines a property is worth, which is different from the actual market value, being the price a Buyer pays for a property.

Determining Assessed Value for Existing Properties
An appraiser from the tax office will typically review and analyze 5 comparable properties that have sold prior to July 1 of a given year (without actually visiting the properties) to determine the assessed value of a given property on October 1. Since the appraiser only analyzes comparable properties sold prior to July 1, the appraiser will also evaluate how much the market may have moved up or down in the 3 month period from July 1 to October 1 and consider such market move in determining the property’s value on October 1. The assessed value on October 1 is used to calculate property taxes due the following fiscal year and the actual property tax rates are determined the following June. A property’s assessed value is mailed to the owner in December. This means during December (assuming the mail arrives during December) an owner will know the assessed value, but the owner will not know how much properties taxes will be due, before the following year June, when the tax rates are determined.

Example
The assessed value on October 1, 2021 is used to determined property taxes for fiscal 2022 (July 1, 2022 – June 30, 2023) and such assessed value is mailed to the owner December 2020. Property tax rates for fiscal 2022 is determined June 2022, which means an owner will not be able to calculate property taxes due for fiscal 2022 before sometimes during June 2022 (the property tax office will mail the owner property taxes that are due during July 2022).

Determining Assessed Value for New Construction
See our post How is Assessed Value Determined for New Construction.

How to Contest Assessed Value in Honolulu

An owner can contest and appeal the assessed value if an owner believes the assessed value is too high. However, make sure to have actual recent sold data to back your claim. Feelings about market directions and properties listed for sale (not sold) is irrelevant. Appeals can be filed online From Dec 15 of a given year through Jan 15th of the following year from this site (click on “File an Appeal”).

What are Penalties for Late Property Tax Payment in Honolulu

Property taxes not paid by the due date are subject to a penalty up to 10% and, on top of that, interest at the rate of 1% each month, or fraction thereof, which will be applied to all delinquent taxes and penalties. So, please, don’t be late paying your property taxes!

How to Reclassify a Property in Honolulu

An owner of a condo, classified as Hotel & Resort for property tax purposes, who does not run a short-term rental business – no rentals less than 30 days per tenant – may apply for a dedication to Residential use, which, if granted, will reclassify the condo to either Residential or Residential A (determining factors being the owner usage – primary home or not – and the assessed value). Based on the current property tax rates, there could be significant tax savings by reclassifying to a residential status. Learn how to reclassify a condo to residential use and note, you must apply prior to September 1st of a given year for the dedication to take effect from the beginning of the next fiscal year, starting July 1st. Regretfully, the reclassification – from Hotel Resort to Residential – doesn’t take effect immidiately.

Good to Know for New Property Owners in Honolulu

If you are a new property owner, requesting the tax office to send your tax bill to a different address than the previous owner, it may take about 4 months before the City & County of Honolulu updates their records with your address and a property tax bill may mistakenly be mailed to the previous owner’s address. You can, upon taking ownership, call the Honolulu Property Tax Department (808) 768-3980 and ask them to mail the next tax bill to your address.

You can also keep an eye on property taxes due from this page and:
1) Select “Yes, I accept the above statement”,
2) Click “Search by Site Address”
3) Enter the Street Number, Street Name and Unit Information.
Do not include street suffix such as “Boulevard”, “Street”, “Avenue” etc.

History of Honolulu Property Tax Rates

Below table shows how residential property tax rates have changed over the past 8 years. Keep in mind:

• “Fiscal 2022” runs July 1, 2022 through June 30, 2023.
• Residential A shows 2 rates since it is a two tier tax rate system, as outlined in the beginning of this post. The first rate (e.g. 0.45%) is for assessed value up to $1M and the second rate (e.g. 1.05%) is for assessed value above $1M.

Disclaimer: This information is for general information purposes only and should not be relied upon for any legal, business, economic or tax decisions. We are a real estate agency, not tax or legal advisers, and we do not provide any form of legal or tax advice and before making any decisions you should consult with a qualified adviser.