BY JEREMY STICE, R(S) – Considering that Maui is one of the most beautiful places in the world to live and arguably the most desirable island in all of Hawaii, it is pretty awesome that our residential homeowner taxes are the lowest in all of Hawaii.
When discussing Maui property taxes, it is important to differentiate properties that will be used as a primary residence, and are thus eligible for a “homeowner’s exemption” and a lower tax rate versus those properties that are considered second homes or investment properties where there is no exemption and properties are taxed at a higher rate.
Maui County Primary Residences
For homeowners who file for a home exemption on their taxes as they use the property as their primary residence, they are entitled to a $300,000 exemption off the top of the assessed value and taxed at the homeowner rate. According to a recent Maui News article, “almost a third of all homeowners on Maui today pay the minimum property tax. In total, the number of homeowners who pay the lowest amount of property taxes possible has increased by 800% since 2003.”
Full-time local residents, like the Ancheta Ohana, will be paying very low property taxes on their Wailuku home (pictured above) as it is their primary residence. Read about the Ancheta’s success story in this blog, Maui REO Closed – Stice Team Plays Hard Ball With Solid Representation.
To equate this to real numbers—Illima Loomis, the author of the Maui News Articles, states that, “the owner of a home valued at half-a-million dollars would pay about $500 in property taxes in Maui County, compared to $1,436 in Honolulu, $1,681 on Kauai, and $2,553 on the Big Island, according to Finance Department calculations.”
Maui homeowners are enjoying considerably lower property taxes than any other Hawaii county. Honolulu claims the second highest homestead exemption in Hawaii at $80,000 per assessed value.
How long will Maui homeowners enjoy these unique property tax benefits?
That remains to be seen as the Maui County Council is evaluating a proposal to lower the exemption to $200,000. My personal take is that the County of Maui will likely drop the exemption to $200,000 and raise the minimum tax to about $300 per year rather than the current $150 annual amount.
Most owners of homes in neighborhoods like The Summit in Kaanpaali Golf Estates (pictured above) only live on Maui part time and thus they pay improved residential rates. Read all about the luxury homes of Kaanapali Golf Estatates in one my previous blogs featuring some great aerial photographs a lot of detailed neighborhood information. Kaanapali Golf Estates Homes For Sale on Maui.
Maui County Second Homes or Investment Property
There are no exemptions in place for these types of properties and the rate is $5.00 per $1,000 of assessed value and thus the property taxes are a little more than twice as high than primary residences.
Almost all units like Unit #748 at the Honua Kai Resort and Spa in Kaanapali, Maui are taxed at the hotel rate. Read about Hokulani #748 and my Top Two bedroom Deals in Honua Kai Resort Here, and the 35% Price Reductions at Honua Kai here.
Maui County Hotels or Resort Properties
If an occupant actually lives in a resort he/she can be entitled to a homeowner’s exemption and pay lower taxes, but this is a very rare case as most owners spend a couple of weeks or months at their property and thus pay taxes at $8.30 per $1,000 of assessed value.
Rates for Maui Property Taxes
Classification Land Building
Improved Residential $5.00 $5.00
Apartment $5.00 $5.00
Commercial $6.25 $6.25
Industrial $6.50 $6.50
Agricultural $5.00 $5.00
Conservation $5.00 $5.00
Hotel and Resort $8.30 $8.30
Unimproved Residential $6.25 $6.25
Homeowner $2.50 $2.50
Time Share $14.00 $14.00
Commercialized Residential $4.00 $4.00
*Rates are based of $1,000 of assessed value.
For whom do these rates apply?
All Maui County residents and/or property owners including the islands of Maui, Molokai, and Lanai.
What is the County of Maui assessed value?
The County of Maui’s assessed values typically trail market values anywhere from 12-24 months. This is why in a declining market, like right now, many homeowners will be paying taxes on assessed values that are actually higher than what their property is worth. Conversely, in an appreciating market—owners will be paying taxes on assessed values that are lower than what their property is worth. The County of Maui has improved this process, but this is my observation from my own professional experience.
How do I file for a homeowner’s exemption?
Here is the form that you need to submit before Dec. 31 to apply for the following fiscal year of taxes.
When are my property taxes due?
Property taxes are paid two times per year- First half payments are due on or before Aug. 20 for the period of July 1 to Dec. 31 and second half payments are due on or before Feb.20 for the period of Jan.1 to June 30.
I hope that you enjoyed and found this post on Maui property taxes helpful. Should you have any more questions regarding appeals of your property taxes, classifications, rates, time lines, or anything else, I would highly encourage you to visit the County of Maui Real Property Tax Division.
For all things that are Maui real estate and The Maui Life, please directly contact me.
Jeremy Stice, R(S) writes for HawaiiLife.com. Reach him at Stice@HawaiiLife.com