Hawaii's Tax Landscape and Your Mortgage
Hawaii uses a progressive income tax with a top rate of 11%. A household earning $150,000 pays an estimated $10,725-$14,025 in state income tax, depending on filing status and deductions. That's $1,031/month less available for housing costs.
At the state's median home price of $850,000, the $0.27% property tax rate adds $191/month to your mortgage payment. That's $2,295/year — below the national median of ~1.1%.
Property Taxes Across Hawaii
The 0.27% statewide average masks significant variation. Lowest property tax rate in the nation at 0.27%
Price ranges across the state: Honolulu has a median of $910,000, while Big Island (Kona) sits at $625,000 — a $285,000 gap that dramatically changes your monthly payment. At $0.27% property tax, that price difference alone means $64/month more in property tax in Honolulu.
Homebuyer Programs and Exemptions
Hawaii offers several programs for homebuyers:
- HHFDC Hula Mae program with below-market rates
- Down payment assistance through county programs
Homestead exemption: Owner-occupied exemption varies by county: Honolulu $120,000, Hawaii County $130,000, Maui $200,000
Hawaii-Specific Considerations
- Lowest property tax rate in the nation at 0.27%
- Second-highest income tax rate in the nation at 11%
- Extremely high home prices due to limited land and island geography
- High-cost area conforming loan limit of $1,209,750
- Lava zone and hurricane insurance add significant costs on Big Island
- Property tax rates vary by island and county — Honolulu County (Oahu) has different rates than Hawaii County (Big Island) and Maui County