Maui Property Taxes
One of the most common questions I get selling real estate on Maui is "How much are taxes?" With so many people retiring on a fixed income, or hard working families looking to keep home ownership costs under control, knowing what the tax man will take is a major key consideration in a purchase.
Here are the top 5 things you need to know about real property taxes on Maui. (Click Here for Maui Tax Calculator)
The advertised tax cost in the listing is not necessarily what you will be paying! Why? Because when you close on a property on Maui, you “inherit” the tax rate of the previous owner, until the next fiscal tax year (which actually begins in the summer!) So let’s say you purchased a home from a second home owner (which is a higher tax rate) then you will pay that same rate until you file for a primary homeowner exemption (deadline is Dec 31) in which case your taxes will go down significantly once that takes effect. If you don’t file the proper documents in time, your tax rate will continue (read default) to the higher second home property tax rate indefinitely.
Taxes are relatively low in Hawaii! Why? Public schools are not funded by real estate taxes! All public schools in Hawaii are funded at the State level through the General Excise Tax.
Property Tax rates have been increasing in recent years on Maui. So don’t be surprised when you get a little sticker shock at your next tax bill. This is especially true if you are vacation renting your home or condo as this is the highest tax bracket.
If you purchased a home or condo that has been conducting short term rentals and you plan to live in that property as a full time resident, your taxes will significantly decrease once it is re-classified as a primary or second home. And remember that single family homes on Maui with a short term rental or Bed and Breakfast license DO NOT transfer with the sale.
If you would like to calculate the current tax rate and annual cost for the home, land or condo you are considering, CLICK HERE for an interactive google sheets calculator, or use the one below.
If you have any questions, please reach out directly to Eric West at 808-298-2030 Mahalo!!