Home Exemptions: Save Thousands of Dollars on Property Taxes

Aloha homeowners!

If you live in your home or condo as your primary residence in Honolulu County, Oahu, it’s time to claim your Home Exemption. This fantastic tax break can save you thousands of dollars on property taxes!

Important Deadline

Make sure to file by September 30th, the annual filing due date. Your tax break will take effect next fiscal year, starting on July 1st after the September filing deadline.

Are You Eligible?

To qualify, you need to own and occupy your Honolulu property as your primary residence. Remember, you can only have one primary residence.

You can prove it’s your primary residence with:

• Evidence that you live at this address for at least 270 days per year.
• This address showing on your voter registration.
• This address showing on your State or Federal income tax return.

Additionally, you need to be at least 18 years old and a legal resident of Honolulu County.

How Much Can You Save?

The amount you can save depends on your age by June 30th prior to the September 30th filing deadline, and will take effect on July 1st the following year. Here’s the breakdown:

• $100,000 if you’re below age 65 (standard exemption).
• $140,000 if you’re age 65 and above.

For couples owning separate homes and living apart, each spouse is entitled to one-half (½) of one exemption. Each owner-occupant needs to submit a separate exemption claim.

Your home exemption amount will be deducted from the assessed value, and you’ll only be taxed on the net assessed value (Assessed Value – Home Exemption = Net Assessed Value).

Example: Let’s say your primary residence is assessed at $900,000. If you’re 65 years old by June 30th this year and you file on time by September 30th, you’ll only be taxed on $760,000 net assessed value starting July 1st next year ($900,000 – $140,000 = $760,000). At the $3.50 rate per $1,000 assessed value, this will save you $490 per year compared to having no home exemption.

Major Savings Scenarios

You’ll see significant savings if:

• Your property is assessed at $1 million or above, or
• The property is zoned as ‘Hotel & Resort’ (like a condotel).

Honolulu County has three relevant property tax rates:

• Residential: $3.50 per $1,000 assessed value (one of the cheapest rates in the nation).
• Residential Rate ‘A’ (applies to residential properties assessed at $1 million and above, without home exemption):
  • $4.50 per $1,000 of net taxable value for homes and condos assessed up to $1 million.
  • $10.50 per $1,000 of net taxable value for homes and condos assessed above $1 million.
• Hotel and Resort: $13.90 per $1,000 assessed value for resort-zoned properties (like Trump Tower or Ritz Carlton), unless you apply for the dedication for residential use.

Huge Savings Example

Let’s say you’re 65 years old by June 30th this year and you own a luxury condotel at Trump Tower assessed at $2 million. If you live there as your principal residence and file by September 30th this year, starting July 1st next year, you’ll see these savings:

• Without Home Exemption: $2 million assessed value x $13.90 per $1,000 = $27,800 in taxes.
• With Home Exemption: $2 million – $140,000 exemption = $1.86 million net assessed value x $3.50 per $1,000 = $6,510 in taxes.

That’s a savings of $21,290 per year!

Remember, to claim the lower $3.50 residential tax rate for your condotel, you need to file the dedication for residential use as well.

Don’t miss out on these savings! File for your Home Exemption by the deadline and start saving on your property taxes. If you have any questions, feel free to reach out. Happy saving!

How do you file?

UPDATE: You may now file directly online.

Or, click here to download form P-3. Make sure to file by the 9/30 deadline!

Complete the Parcel ID number on the top left corner in the 12-digit format, which means you skip the first digit #1 (#1 represents Oahu), and you include all zeros. If you count the digits from the back with all zeros and you skip the #1 first digit you should have 12 digits. Add “-HEX” at the end (for Home Exemption).

Complete your name, social security number, and birthday. Remember you are entitled to a larger home exemption than the standard $100K if you are age 65 or above. That’s why you will need to attach proof of age, such as a copy of your picture ID.

Fill in the property address and complete the rest of the form, including: I’m a legal resident of “USA, Hawaii, Honolulu County”

Do you have a home exemption anywhere else?  Yes / No.  Remember you can only have one primary residence and therefore you can only claim one home exemption.

Include a photocopy of the form and a self-addressed stamped envelope to get a stamped receipt. Make another photocopy for yourself so you know what you mailed in.  Instructions are on the back of the form including the address where to mail it.