Hawaii's Low Property Taxes: A Hidden Advantage for Homeowners

Hawaii’s real estate market is often associated with high home prices, but one financial advantage that many buyers overlook is the state’s exceptionally low property taxes. For owner-occupied homes in Honolulu County, the property tax rate is one of the lowest in the nation, making homeownership more affordable than it might initially appear.

How Low Are Property Taxes in Honolulu County?

As of 2024, the property tax rate for owner-occupied residences in Honolulu County is just 0.35% of assessed value. That means for a home valued at $1,000,000, the annual property tax bill would be approximately $3,500—significantly lower than in many mainland metro areas.

Additionally, Honolulu County offers exemptions that further reduce the taxable value of owner-occupied homes. Homeowners under 65 receive a $120,000 exemption, while those 65 and older benefit from a $160,000 exemption. Furthermore, completely disabled veterans are exempt from all property taxes except for the minimum tax, providing additional financial relief for those who have served.

Comparing to Other Major U.S. Cities

For perspective, here’s how Honolulu County’s property tax rate stacks up against some major metro areas:

• Honolulu, HI – 0.35%

• San Diego, CA – ~0.73%

• Seattle, WA – ~0.88%

• Denver, CO – ~0.48%

• Austin, TX – ~1.68%

• Chicago, IL – ~2.16%

A homeowner in Chicago with a $1,000,000 home might pay over $21,000 annually in property taxes, while a similar homeowner in Honolulu would pay just $3,500. Even compared to a relatively lower-tax metro like San Diego, where the same home would incur around $7,300 in property taxes, Honolulu offers substantial savings.

Why Are Property Taxes So Low in Hawaii?

Hawaii’s tax system is structured to rely more on tourism-related taxes and consumption taxes, such as the Transient Accommodations Tax (TAT) and the General Excise Tax (GET). Additionally, since Hawaii is a small state without independent school districts it funds education through the general fund, rather than property taxes like most areas in US.

What This Means for Homebuyers

For those considering buying a home in Honolulu County, the low property tax rate is a significant financial incentive. Lower taxes mean lower monthly housing costs and greater affordability over the long term. For military families relocating to Oahu, retirees looking for a home in paradise, or investors evaluating real estate opportunities, this tax advantage makes Honolulu an even more attractive place to buy.

If you’re interested in learning more about Hawaii real estate and how you can take advantage of these low property taxes, feel free to reach out. Whether you’re moving to Oahu for a military PCS or considering a long-term investment, I’d love to help you navigate the market!