Inflation is on everyone’s minds these days which is why it’s always great to learn about new ways to keep costs down. Here’s some information on two different property tax exemptions that can potentially save you money if you own a home or condo here on Maui. The tax relief programs available for homeowners in the State of Hawaii varies from island to island, so keep in mind we are focusing just on Maui County. I’m going to share info about two distinct tax exemptions that property owners on Maui might qualify for: First is the homeowner exemption and second is the long-term rental exemption.

Homeowner exemption

The first program reduces your taxable assessed value by up to $200K and applies only to resident homeowners, meaning owners who occupy the property as their principal residence, who have filed 2 years of Hawaii state property taxes consecutively.

Long-term rental exemption

The second, program which began earlier this year, offers new potential tax savings to both non Hawaii residents and resident homeowners who rent their property out for long-term purposes. 

Homeowners may qualify for this exemption if the following items are satisfied:

• Owners must rent to one tenant for 12 or more consecutive months
• Have a signed long-term lease contract that reflects above terms
• Do not owe back property taxes owed on the property
• Exemption applies only to residential properties only. Commercial and industrial properties do not qualify.

If you’d like more information on this program, you can visit the Maui County Real Property Tax Website. Your application for this year must be filed no later than Dec. 31, 2022. You must also attach a signed copy of a fully executed rental lease contract to qualify for the 2022 tax year. If your application is approved by the department of finance, your property tax exemption will go into effect January 1st of the upcoming assessed year. 

View Application Form – Long Term Exemption

We would highly recommend hand delivering these applications this time of the year as time is of the essence. The Department of Finance is located 110 ‘Ala’ihi Street, Suite 108 Kahului, HI 96732.

This is good news for non Hawaii resident homeowners who do not qualify for owner-occupied exemptions. You can now take advantage of this new program if they rent long-term and potentially claim up to $200K in exemptions. This incentivizes non-resident owners and benefits local renters who have a hard time finding suitable long-term affordable rental options on Maui.

Combining exemptions

Hawaii resident homeowners who own multiple properties may potentially be able to claim both the owner-occupied exemption of up to $200K plus an additional exemption of up to $100K for each tenant-occupied property that satisfies the long-term rental criteria we listed above. Long term property rental exemptions are allowed on more than one home provided that they are located on separate pieces of property.

As a disclaimer, our team highly advises you to verify the above details with a professional tax attorney or CPA as we are not qualified to give you any tax advice. Salma Ansari is a great local CPA located in Paia Town that we highly recommend reaching out to regarding the Maui County Homeowner and Long-Term Rental Exemptions or any other tax questions for that matter.

Beyond being a trusted advisor in the real estate market, your REALTOR should be a professional who recognizes their role in supporting your wealth building and wealth preservation. Helping to magnify wealth is one of the core values of The Sayles Team, a set of guiding principles for how we serve our clients at the highest level. As experts in the field, we are constantly learning and providing guidance about making the wisest choices for the future. If someone you care about needs guidance or recommendations, please share our contact information and we would be honored to help them! If you would like to receive our in-depth market update or would like an evaluation of your property’s value we would love to hear from you.

Anthony Sayles R(S)
Direct mobile: (808) 280-6532
Anthony@DanoSayles.com

Anthony Sayles R(S)
Direct mobile: (808) 280-6532
Anthony@DanoSayles.com