Sun, sand, a fruity drink with a mini umbrella.
Who doesn’t dream every now and then about a little vacation spot in paradise? If you’re thinking about Hawaii, however, do your homework or your dream could very quickly become a costly nightmare.
Not only does each island have its own vibe and personality, it turns out they all have different property tax rates. Even within a given island the type of property can greatly affect the amount of money land owners pay.
Maui, for example, is the best deal for a homeowner with a cost of $2.50 per $1,000 of net taxable building and land. Next is Honolulu at $3.42. As for Hawaii? The Big Island = Big Taxes. Homeowners on Hawaii are charged $5.55.
These discrepancies are not minor but when compared to the tax variation in the kind of property they tend to pale in comparison. Take Maui. Homeowners pay the least at $2.50 followed by commercialized residential at $4.00. Apartment owners are charged $5.00 while the cost for hotel and resorts leaps up to $8.30.
Still, as pricey as that may sound, it’s nothing compared to time shares at...wait for it...$14.00. Yes, you read that right. Time share property owners are paying between five and six times more in property taxes than homeowners on Maui. (For a more detailed list of islands and property classes, click here.)
Interestingly, unlike many states Hawaii’s property taxes do not go toward education (that money comes out of the state’s general fund) but rather for each county’s programs and administrations.
We’ve all heard the term “caveat emptor” (Latin for “let the buyer beware”). If you’re considering property purchase in the Pineapple state you might want to take this advice to heart.