Here is how property taxes are figured in the County of Hawaii: You multiply the tax rate times the number of thousands in the assessed valuation, less any exemptions.
Assessed Valuation – Exemption X rate = tax
So if a property is assessed at $400,000 and there are no exemptions the rate will be $10.05 (see link below). So that’s $400,000 divided by 1,000 = 400 X $10.05 = $4,020.
Here is a link to the County of Hawaii Real Property Tax Office website that has all the rates:
If the property is owner occupied, it’s the owner’s principal residence and the owner pays Hawaii State income taxes, there is a Homeowner’s Exemption that is deducted from the Assessed Value. Here is the link to a two page explanation of the Home Exemptions. http://www.hawaiipropertytax.com/forms/Home%20Exemptions%20Brochure.pdf In general, the taxes will be less than half if the property is the owner’s principal residence.
One of the reasons the amount of the tax will vary considerably is because of the exemption. If you are an owner occupant you get the exemption stated in the above link. But you also get an additional exemption of 20% of the assessed value up to $80,000. Therefore, a person over 70 living in their principal residence valued at $500,000 will have an exemption of $180,000; $100,000 for being over 70 and the maximum of $80K for the 20% of their assessed value (20% of $500K is actually $100K, but the maximum exemption is $80K). That is, they will only pay taxes on $320,000 instead of the $500,000. Plus, the rate is only $6.15/thousand for the owner occupant as opposed to $10.05/thousand for a non owner occupant. So the taxes are actually less than half for your principal residence. Another factor that can lower your property tax is the fixed Agricultural assessment. The County has fixed the assessed value for lands used for coffee from $1,500 to $3,000 per acre. The fixed assessed value for lands used for pasture range from $14 to $420 per acre. The difference is if a property is dedicated to agriculture or not and the quality of the pasture land. The tax office only gives the Homeowner’s Exemption for the house and about 10,000sq.ft surrounding the house. So if the land is valued at $100,000 per acre, that’s another $500,000 in assessed valuation for a 5.1 acre parcel. But if you put a fence around it and designate it as pasture, then the maximum value per acre is only $420, a total of only $2,250 in additional assessed valuation. That is why you may see one 5 acre property with a house paying $4,000/year and another only paying $500/year.