Property Taxes
Property Tax Options and Calculations
Homeowner classified property is taxed at a rate of $6.15 per $1,000 of Net Taxable Value. Non-Dedicated Agriculture classified property is taxed at $9.35 per $1,000 of Net Taxable Value. But since land in agricultural use may be assessed at values far lower than market value, Non-Dedicated Agriculture classification may result in lower taxes even though the tax rate is significantly higher.
Which classification will result in a lower tax bill depends on the relative taxable value of the home compared to the taxable value of the land. If the home, after all exemptions are deducted from its value, has a considerably higher assessment than the market value assessment of the land, having both land and home taxed at the lower rate of $6.15 per $1,000 may produce a lower tax bill than by staying in agricultural status.
Calculating Taxes Under Different Classifications
Following this article, you will find an interactive worksheet which will aid you in comparing your individual assessment values and property taxes under various scenarios.
Here is how to compare the two options: Every assessment notice has several values listed for both the land and the home (including other buildings on the property). They can be found either on the assessment notice you are sent every March 15th, in the public records at the Tax Office or on the Tax Office web site. They are: Land Market Value; Land Assessed Value; Building Market Value; Building Assessed Value; Total Market Value; Total Assessed Value; Total Exemption Value; Net Taxable Value.
If you are already in the Homeowner classification: To estimate what your taxes should be under an Agricultural land classification, adjust the Land Assessed Value based on the land use values given in the AGRICULTURAL GUIDELINES seen at the bottom of this page. This will be a very approximate value.
The final value will depend on a Tax Office appraisal! Add this value to the Building Market Value and subtract the Exemption Value (it is important to use Market Value since conversion to Non-Dedicated Agriculture status will immediately cause your Building Assessed Value to revert to market value, which may be higher than assessed value). This will result in the Net Taxable Value. Multiply that Net Taxable Value by 0.00935 and you will get your approximate tax owed for the year. If this is significantly less than what you are now paying, you may wish to apply for Non-Dedicated Agriculture status.
If you are already in the Agriculture classification: To see what you would pay under the Homeowner land classification, add the Land Market Value and the Building Assessed Value (or Market Value, since they are the same in this classification) and subtract the Exemption Value. Multiply the result by 0.00615 and you will get the tax owed as if under the Homeowner classification. If this significantly less than what you are now paying, you may wish to apply for Homeowner status.
Reminder – All applications for change of classification (or renewal of classification if required by the Tax Office) are due by December 31st, as are all applications for Homeowner exemptions.
The Property Tax Calculation Interactive Worksheet
To make your experiments with property tax scenarios a bit easier, we have provided an interactive worksheet which will perform calculations for you, based on values you enter. The worksheet is in MS Excel format. When you click on the link, you will be asked to open the worksheet in Excel, or you may choose another tool which mimics Excel.
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Begin by locating your Property Taxes Assessment Notice (mailed in March), or go to the Hawaii County Property Tax website (https://www.hawaiipropertytax.com/search.html) and search for your property records. You will need your current classification (Homeowner or Agricultural) and various assessment values for your property.
When the worksheet opens, you will likely see a “PROTECTED VIEW” security message, followed by an “Enable Editing” button. Clicking the button will allow you to perform the interactive functions and calculations in the worksheet. While we can assure you that the worksheet resides in a secure location, you may choose to stay in “Protected View,” in which case you can print the document and use it as a guide as you do the calculations by hand.
When the worksheet opens, you will likely see a “PROTECTED VIEW” security message, followed by an “Enable Editing” button. Clicking the button will allow you to perform the interactive functions and calculations in the worksheet. While we can assure you that the worksheet resides in a secure location, you may choose to stay in “Protected View,” in which case you can print the document and use it as a guide as you do the calculations by hand.