Hawaii has the Lowest Property Tax Rates in the US

One of the considerations when purchasing a property are what are the property taxes?   This rate can vary depending on what state a property is and even county or municipality.  In a recently published article, CoreLogic calculated the average median tax rate for each of the 50 States and the District of Columbia coming up with great information.

Property Tax Median in US - (C) CoreLogic

Property Tax Median in US – (C) CoreLogic

The average property tax rate across the country is 1.31% so a homeowner with a home valued at $200,000 will, on average, pay annual total property taxes of $2,620”.  The highest average rates are in Illinois at 2.67% and the lowest is here in Hawaii with .31%.  There are many factors that go into how a tax rate is determined and each area has its own formula.  Usually, the highest portion of taxes goes towards education, especially at the local level.  Hawaii has a statewide school district which is funded from the General Excise Tax charged on all goods and services, not from property taxes.

Each island is its own County as well (except Maui County which consists of Maui, Molokai, Lanai and Koho’olawe islands).  Each County then sets its own tax rates for various property types.  On Maui, the lowest rate is the Homeowner Rate at .27% plus a $200,000 exemption of the assessed value.  In order to qualify for this rate the home has to be the homeowners primary residence, not a second home.  Other rates are Improved Residential (non-homeowner) .54%, Hotel (vacation rental) .88%.  A complete list of the rates for the 2015/2016 tax year are included here.

Maui County Property Tax Rates 2015-2016

Maui County Property Tax Rates 2015-2016

Tax rates are set annually by the County Council usually late in May for the Fiscal year starting June 1.  Though budgeting for property taxes is important, the overall amount charged in Hawaii is much less than other states.  When considering a property make sure to take a good look.  The last thing you want to find is property taxes are the item that makes a property not affordable.  If you want to receive the 2016/2017 tax rates for Maui when they are published send me a message at Dan@Mauihomebuyer.com

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