Maui Property Tax

How a Property’s Value is Assessed on Maui

The method by which property values are assessed varies from state to state. In Hawaii, property tax is assessed annually using the cost and market comparison approach. This assessment is conducted by the Real Property Assessment Division of the Department of Finance. Considering that this value is critical in the overall costs of owning, a thoughtful approach is necessary as well as considerations of the classification of the property in its highest and best use. To determine fair market value, Maui uses the mass appraisal technique.

Mass Appraisal Technique

According to the International Association of Assessing Officers, the mass appraisal technique is the “process of valuing a group of properties as of a given date and using common data, standardized methods, and statistical testing.” What this means for Maui property taxpayers is that once a year, on January 1st, property values are assessed using a computer model of value. This number will determine your property taxes for the new tax year that begins on July 1st of the same year. Forgoing a yearly inspection, this number is based on a previous inspection-based appraisal.

Classifications of Maui Property

The official website defines classifications as

Property is classified based upon its highest and best use.

Properties receiving homeowner exemptions, condominiums, permitted bed and breakfasts and permitted transient vacation rentals are exceptions.

Properties which have been granted a homeowner exemption are classified as Homeowner.

Condominiums, such as Honua Kai,  are classified upon consideration of their actual use (Apartment, Commercial, Hotel / Resort, Timeshare, Homeowner).

Properties that have been granted a bed and breakfast permit, a transient vacation rental permit or a conditional permit to operate a transient vacation rental are classified as Commercialized Residential.

Maui Property Tax Rates for 2020-2021 (Per 1,000 of tax assessed value after any exemptions)

Owner Occupied Tiered-rates are below:

  • Tier 1: up to $800,000 is $2.51
  • Tier 2: $801,000 to $1.5M is $2.56
  • Tier 3: more than $1.5M is $2.61

Non-Owner Occupied Tiered-rates are below:

  • Tier 1: up to $800,000 is $5.45
  • Tier 2: $801,000 to $1.5M is $6.05
  • Tier 3: more than $1.5 is $6.90

Apartment Tax Rate is  $5.55

Commercial Tax Rate is  $6.29

Industrial Tax Rate is  $7.20

Agricultural Tax Rate is  $5.94

Conservation Tax Rate is  $6.43

Hotel and Resort Tax Rate is  $10.70

Time Share Tax Rate is  $14.40

Commercialized Residential Rate is $4.60

Short Term Rental Rate is $11.08

Maui Property Tax Rates for 2019-2020 (Per 1,000 of tax assessed value after any exemptions)

Residential: $5.60

Apartment: $6.31

Commercial: $7.39

Industrial: $7.48

Agricultural: $5.94

Conservation: $6.43

Hotel and Resort: $11.00

Time Share: $14.40

Homeowner: $2.90

Commercialized Residential: $4.60

Short Term Rental: $10.75

Qualifying for Homeowners Exemption

A homeowner’s exemption provides tax relief for Maui residents that alleviates some of the tax burden caused by higher than normal property values in the US. It reduces the tax assessed value of your property by $200,000. The homeowner’s exemption also allows you to claim homeowner classification providing an even lower rate. To meet the requirements for homeowners exemption, one must reside in the home for a period of 270 days every year, one must not rent the whole property at any given time, file income taxes as a Hawaii state resident the year prior to application, and your property taxes must be current at the time of filing.

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Evan Harlow

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