Effective rate, median annual bill, homestead exemption, and assessment cap rules under HRS § 246-26
Median bill is the actual ACS 2022 figure for owner-occupied housing units in Hawaii. Your specific bill will vary by county and municipality, local mill rates can swing the effective rate by 30%+ within a single state.
Hawaii carries the lowest effective property tax rate in the country — the Tax Foundation puts it at 0.29% of owner-occupied home value for 2026, against a national average near 1.0%. That headline number is real, but it describes an owner-occupied home, not a rental. Hawaii has no state property tax; all four counties (Honolulu, Maui, Hawaii, and Kauai) set their own rates and classes, and every one of them charges investors more than resident owners.
The gap comes from two levers: the home (owner-occupancy) exemption, which rentals cannot claim, and separate investor rate classes. On Oahu a rental worth $1,000,000 or more with no home exemption is reclassified as Residential A, and value above $1,000,000 is taxed at 1.14% — nearly four times the statewide 0.29% figure. Knowing which class your property lands in matters far more here than the state average.
The Tax Foundation's 0.29% effective rate is the lowest of any state and is calculated on owner-occupied housing value. It bakes in Hawaii's generous home exemptions and low homeowner rates — advantages a rental owner does not receive. For an investor, the relevant number is the county rate class that applies once the property has no home exemption on file.
Because Hawaii taxes at the county level, there is no single "Hawaii rental rate." Instead each county sorts property into classes (Residential, Residential A, Apartment, Long-Term Rental, Non-Owner-Occupied, Hotel/Resort, and so on) and rentals almost always land in a higher-taxed class than a primary residence next door.
Honolulu's key rule for 2026: any residential property assessed at $1,000,000 or more with no home exemption on file is classified Residential A. Because rentals cannot file a home exemption, most Oahu investment homes over $1M fall here. Residential A is tiered — $4.00 per $1,000 (0.40%) on the first $1,000,000 and $11.40 per $1,000 (1.14%) on value above it.
A $1,500,000 Oahu rental therefore owes roughly $4,000 on the first million plus $5,700 on the next $500k — about $9,700 a year. Multi-unit buildings taxed as Apartment run $11.70 per $1,000 (1.17%), while properties that qualify as Affordable Rental Housing drop to $5.95 per $1,000 (0.595%). Filing for the affordable-rental classification, where you qualify, roughly halves the bill.
Maui County rewards long-term rentals directly. For 2026-27 its Long-Term Rental class (which requires an approved long-term rental exemption) is tiered at $3.00 per $1,000 up to $1,000,000, $5.00 from $1M to $3M, and $8.00 above $3M. Miss that exemption and the property falls into Non-Owner-Occupied: $6.25, $9.00, and $17.00 per $1,000 at the top tier (which now begins at $2.5M). The long-term-rental filing can cut a Maui owner's rate by roughly half or more.
Hawaii County (the Big Island) similarly discounts income-restricted housing — its Affordable Rental Housing class is $5.75 per $1,000 for 2026-27. Across every county the pattern holds: commit the unit to long-term or affordable tenancy and file the paperwork, and you move into a lower class; leave it as a plain investment or short-term rental and you pay the premium rate.
On a low-basis property, Hawaii's property tax is genuinely light. The risk is assessment, not the millage — Hawaii's home values are among the highest in the nation, so a modest rate on a $1M+ assessment still produces a large annual bill, and Residential A's 1.14% top tier compounds that. Underwrite the class-specific rate on the assessed value, not the 0.29% state average.
Nationally, housing-cost burden is measured by HUD's 30%-of-income rule: a tenant is cost-burdened when rent plus utilities exceeds 30% of gross income. Property tax isn't part of that limit, but it flows straight into your operating costs and the rent you need to charge. In Hawaii's tight, high-rent market, the difference between the long-term-rental rate and the non-owner rate can be the margin between a workable rent and one your tenants can't sustain.
County-set: Honolulu $120,000 (under 65) / $160,000 (65+); Maui $200,000; Hawaii County $40,000; Kauai $160,000.
The exemption is granted under HRS § 246-26. To claim it, owner-occupants must typically file an application with the county assessor (most states require filing once, with renewal triggered only by change of ownership or use). Failure to file the application means full taxation at the non-homestead rate.
Rates cited here are drawn from the Tax Foundation's 2026 state property-tax data and the four Hawaii counties' published 2026 (FY2026 / FY2026-27) real property tax rate schedules — City & County of Honolulu, Maui County, and Hawaii County. Property classes and exemption rules change annually and rates are set each spring; confirm your property's current classification and assessed value with the relevant county real property tax office before underwriting. This page is general information for rental owners, not tax or legal advice.
Yes — the Tax Foundation reports a 0.29% effective property tax rate on owner-occupied housing value for 2026, the lowest of any state and well under the roughly 1.0% national average. But that figure reflects owner-occupied homes with home exemptions; a rental owner pays a county investor rate class instead.
On Oahu, any residential property assessed at $1,000,000 or more with no home exemption on file is classified Residential A for 2026. Because rentals can't claim a home exemption, most Oahu investment homes over $1M land here. The rate is $4.00 per $1,000 (0.40%) on the first $1M and $11.40 per $1,000 (1.14%) above it.
It varies by county and value, but the gap is wide. An owner-occupant files a home exemption and gets the lowest homeowner rate; a rental gets neither. On Oahu that can mean 1.14% on value above $1M under Residential A versus a fraction of that for a comparable owner-occupied home.
Often yes, by committing to long-term tenancy. Maui offers a Long-Term Rental class starting at $3.00 per $1,000 (versus $6.25+ for non-owner-occupied) once you file the long-term rental exemption. Honolulu and Hawaii County offer discounted Affordable Rental Housing classifications ($5.95 and $5.75 per $1,000 respectively for 2026). Each requires an application.
No. Hawaii has no state property tax. All four counties — Honolulu, Maui, Hawaii, and Kauai — assess and set their own rates and classes, so the rate on your rental depends entirely on which county it's in and how the property is classified.
The 30% rule is HUD's national benchmark: a household is cost-burdened when housing costs exceed 30% of gross income. Property tax isn't part of that limit, but it's a direct operating cost for landlords that feeds into the rent you set — so a higher tax class can push rents toward the point where tenants become cost-burdened.
Effective rate source: Tax Foundation analysis of Census ACS 2022 (published 2024). Statutory citation: HRS § 246-26. Last updated July 14, 2026. For informational purposes only, not tax or legal advice. Consult a CPA or tax attorney for your specific situation.
