Each of Hawaii’s four counties levies a property tax on owners of homes, businesses, farms and all other types of property, and those ever-increasing tax bills contribute to the state’s cost of living.
So which county residents pay the most in property taxes? The answer depends on the measurement.
As shown in the image above, Maui residents pay the most in property taxes per capita, at $4,139, while Honolulu residents pay the least, at $1,817.
But the comparisons can get much more complicated. Measured as a percentage of the gross assessed value of all real property in the county — basically the combined estimated value of all homes, businesses, farms, hotels, etc. in the county — Hawai’i County residents pay the largest share to their county government.
The property tax burden in each county also differs widely by property type. For instance, even though Maui County residents pay the most property taxes per capita, a full-time resident homeowner in Maui County can expect to pay less than a resident homeowner in any other county would for a property assessed at that county’s average value.
This is partly due to Maui County’s low tax rates and generous home exemption for owner-occupied properties. Maui tiers its rates for such properties, but its lowest rate — applied to the first $1.5 million of a property’s value — is less than half Honolulu’s rate for residential properties.
Similarly, even though Honolulu residents pay the least in property taxes per capita, Honolulu businesses pay the most. This is in part because Honolulu’s urban commercial real estate market differs greatly from the other counties, which makes the average assessed commercial property value in Honolulu twice as high as it is in Hawai’i, Kauai and Maui counties.
Another discrepancy between counties is that commercial property owners on Hawaii Island pay 50% more in property taxes than those in Maui County, even though they are assessed at a lower average value, because Hawai’i County has a much higher commercial tax rate.
For lands in the agricultural tax class, differences in the agricultural practices in each county and in how each county assesses agricultural land result in an array of tax bills. Hawaii Island has by far the largest number of lots classified as agriculture, but there are major commercial farming operations in the other counties as well.
Using U.S. Department of Agriculture data to estimate average lot size, owners of agricultural lots in Maui County pay the least in property taxes, on average, on a per acre basis.
While each county’s property tax systems differ, there is always room for improvement. That is why the Grassroot Institute of Hawaii routinely testifies on bills at the county councils that would reduce the property tax burden for Hawaii residents. You can see those testimonies here.
