Hawai'i County's newest property tax rate, $17 per $1,000 on the part of a second home's value above $4 million, drew most of the headlines this year. For a buyer who plans to live at Mauna Kea Resort full-time, a quieter rule often carries more money. The County's lower Homeowner rate is not prorated and not retroactive, and it starts only on one of two fixed dates each year. So a buyer can close, move in, register the car, and still pay second-home rates for six months to a year.
The Gap Between Moving In and the Lower Rate
The Real Property Tax Office states the rule directly. If the home will be your primary residence, you must file a Homeowner application to get the Homeowner benefits. The timing works like this:
- An application filed between January 1 and June 30 takes effect the following January 1.
- An application filed between July 1 and December 31 takes effect the following July 1.
The 2026 assessment insert puts that into dates. An application received by June 30, 2026 gets the benefit starting January 1, 2027. One received by December 31, 2026 waits until July 1, 2027.
Filing just after a deadline is the worst case. An application that arrives on January 2 waits almost a full year for the lower rate, and one that arrives on December 31 waits six months. For a buyer closing this fall, the next cutoff is December 31, 2026, and the earliest benefit date is July 1, 2027.
The size of that gap comes from the rates themselves. For fiscal year 2026–27, which runs July 1, 2026 through June 30, 2027, the County's rate table lists the Homeowner class at $5.75 per $1,000 of net taxable value and the Residential class at $11.10 on its first $2 million, $14.50 on the slice from $2 million to $4 million, and $17.00 on everything above $4 million.
Take an illustrative home with a net taxable value of $6 million. Under the Residential tiers it owes about $85,200 a year. In the Homeowner class, before any homeowner exemption, it owes about $34,500. Each month in the wrong class costs roughly $4,200 in this example.
How the Tiers Stack
The Residential rates are marginal, and they work like income tax brackets. Crossing $4 million does not reprice the whole home at $17. Only the dollars above that line pay the top rate. That is why the bill grows faster than the value.
Bill 128 created the top tier. It passed final reading on March 4, 2026 and became Ordinance 26-23, effective March 25, 2026. The rates came two months later in Resolution 574-26, adopted May 21. The rate on the first $2 million stayed at $11.10. The $2 million to $4 million slice rose from $13.60 to $14.50. The new third tier was set at $17.
The figures below are illustrative estimates on net taxable value. The Homeowner column is shown before any exemption.
| Net taxable value | FY2025–26 second-home rates | FY2026–27 second-home rates | FY2026–27 Homeowner class |
|---|---|---|---|
| $3 million | about $35,800 | about $36,700 | about $17,250 |
| $6 million | about $76,600 | about $85,200 | about $34,500 |
| $10 million | about $131,000 | about $153,200 | about $57,500 |
At $3 million the change from last year is under a thousand dollars. At $10 million it is about $22,000 a year. The parcels above $4 million absorbed most of the increase, which matches the council's stated goal.
Some early reports gave a different Tier Two rate. The Hawaii Tribune-Herald reported $15. That figure belonged to Council Member Jennifer Kagiwada's competing proposal. The adopted rate is $14.50, and that is what the County's own rate table shows.
The County's Number, Not the Contract Price
The tiers apply to net taxable value, which is the County's assessment after any exemptions. They do not apply to the price on a purchase contract. Values are set as of January 1, and they drive the taxes for the fiscal year that starts the following July 1. The County's example: a January 1, 2026 assessment sets the taxes for July 1, 2026 through June 30, 2027.
That calendar leaves a short window each spring. Assessment notices go out by March 15, and the appeal deadline is April 9. The 2026 insert asks owners to check three things on the notice: the exemption, the valuation, and the land classification, which it says "will define the tax rate utilized to calculate taxes." For a home valued near $4 million, the assessed figure decides whether any dollars reach the $17 tier at all.
The two classes also treat rising values differently. The Homeowner class comes with a 3% assessment cap, according to the Real Property Tax Office. Council Chair Holeka Inaba said the cut in the Homeowner rate was meant to help homeowners facing a possible 3% assessment increase from rising property values. The County's materials describe the cap only as part of the Homeowner class. A second home outside that class gets the full assessed value, multiplied through each tier.
Why the Rental Off-Ramp Stops at $2 Million
The council did leave second-home owners a lower-cost path, but only below the luxury price range. The Long-Term Rental class is $7.75 per $1,000. To qualify, a residential property must have a net taxable value under $2 million, and every unit must be rented to the same tenants for at least six consecutive months. Bill 104 created that class in 2024 as Ordinance 24-69, effective January 1, 2026. Council Member Michelle Galimba told the council the County had already received more than 800 applications to join it.
A resort home with a net taxable value of $2 million or more cannot use that class. Short-term rental income does not lower the bill either. Any rental of less than 180 days disqualifies a property from the Homeowner class, whether it covers a room, a unit or a whole structure. The office says it enforces the rule by reviewing advertising, and it applies rollback taxes, penalties and fines under the County Code. A buyer who wants Homeowner status and also expects to rent the home occasionally while away should settle that question before closing.
Who the Top Tier Was Written For
When Bill 128 was still in committee, Real Property Tax administrator Lisa Miura said the new tier would affect 842 parcels, mostly in West Hawai'i, with a combined estimated value of $5.3 billion. Countywide, the full rate package was projected to raise about $17 million. Finance Director Diane Nakagawa linked the need to rising debt service, driven largely by wastewater upgrades the U.S. Environmental Protection Agency requires, and to a projected $15 million shortfall in 2028, as Big Island Now reported. Mayor Kimo Alameda supported the rates in testimony, describing higher rates on non-owner-occupied and investor-owned properties as "a fair and balanced approach."
District statistics show where those parcels are not. In August 2026, the West Hawaii Association of Realtors reported a South Kohala single-family median sale price of $985,000 across 11 sales. A typical South Kohala house sits inside the first $2 million band. Homes in the top tier are mostly in resort enclaves like Mauna Kea, where a home in Mauna Kea Fairways North came to market in June at a $17.5 million asking price. These are exactly the properties where both the class and the filing date carry the most money.
A Short FAQ
When are Hawai'i County property taxes due? On August 20 and February 20 each year. If your mortgage company pays taxes through escrow, you will not receive a bill, but you can look up your taxes through the County's Search My Property tool.
Are resort condominiums taxed on the same tiers? That depends on the parcel's classification. The County's rate schedule also lists Hotel and Resort at $11.55 and Apartment at $11.70. Check the land classification on the assessment notice, or confirm it with the Real Property Tax Office, before you budget for a specific unit.
Does a sale automatically change a home's tax class? The office processes name changes once the deed is recorded with the State Bureau of Conveyances. To move into the Homeowner class, the new owner has to file the application. The County does not make the change on its own. Neither you nor your spouse can claim a homeowner exemption or primary residence anywhere else.
This is general cost-of-ownership information, not tax advice. Confirm the details for a specific parcel with the Real Property Tax Office and your own advisors.
If you are planning a purchase at Mauna Kea, the closing date, the move-in date and the Homeowner filing date can be lined up from the start so you do not pay second-home rates longer than necessary. Doreen Trudeau works through that calendar with clients before they sign. Work with Doreen — Request a private consult.