If you currently own and reside in your property you may be eligible for home-exemption, which would subsequently lower your property taxes. Persons who qualify for home exemption can receive up to $120,000 deducted from their property taxes.
Home-exemption was introduced to Hawaii in 1896, with the intention to promote home ownership and tax relief. At the time, home-exemption was $300.00. Compare that amount to the amount today where basic home exemption is $80,000.00.
For the average homeowner, what this means is that $80,000 is deducted from his/her property’s assessed value. Therefore, if the assess value of a property is $300,000.00, then only $220,000.00 is taxed to the owner of that property.
Of course, the next question is, “How do I qualify for the home-exemption?” According to the Real Property Assessment Division, owners are eligible for home exemption under the following conditions:
- Owners own and reside in their property as their “principal” residence. This means that owners must occupy their home with the intention to live there full-time;
- Owners must record at the Bureau of Conveyances, State Department of Land and Natural Resources, in Honolulu. Owners must record prior to September 30th before the upcoming tax year***;
- Owners must file a claim for home exemption (Form P-3) with the Real Property Assessment Division prior to September 30th before the upcoming tax year.
It is important to note that depending on an owner’s situation, they may qualify for a higher home-exemption amount. For example, seniors (65 years of age or older) are eligible for a $120,000 home-exemption. However, in order to qualify, seniors must register on or before June 30th prior to the tax year.
We hope you find this information helpful and, if you have not already investigated home exemptions will now do so!