Property Tax Exemptions for Residents Over 60 in West Hawaii

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couple holding hands on beach during sunsetLUVA Real Estate agents talk to MANY people who are considering buying a home in West Hawaii as a retirement home before or after they retire. Did you know that after you reach the age of 60, you can get an $80,000 a year tax exemption on your property taxes and when you reach 70, you can get $100,000? It pays to be of retirement age in Hawaii, right?

Below is information from the Hawaii Real Property Tax Division website outlining information to assist property owners in the County of Hawai‘i with an explanation of the benefits associated with the filing of a claim for home exemption. The home exemption is deducted from the gross value of your property to arrive at the net taxable value for the property.

The basic home exemption is $40,000. In 2005, an additional exemption of 20% of the assessed value of property not to exceed $80,000 was also enacted.

Who Qualifies for the Home Exemption?

You are entitled to the home exemption if:

  1. You own and occupy the property as your principal home for more than 200 calendar days of a calendar year. The term “principal home” is defined as the place where an individual has a true, fixed, permanent home and principal establishment and to which place the individual has whenever absent, the intention of returning.It is the place in which a person has voluntarily fixed habitation, not for mere special, temporary or vacation purposes, but with the intention of making a permanent home. The four elements that are necessary for real property to be considered a “principal home” are:
    1. The owner has no other home exemption or principal home in any other jurisdiction;
      • For those aged 60 to 69, the exemption amount is $80,000.
      • For those 70 and older, the exemption amount is $100,000.
    2. The owner maintains the principal home within the County;
    3. The owner’s actual physical occupancy of the principal home within the County; and
    4. The owner has filed a Hawai‘i state income tax return as a full time resident for each fiscal year that the exemption is sought or has filed a conditional waiver of this requirement.
  1. The ownership of your property is recorded at the Bureau of Conveyances on or before December 31 preceding the tax year for which the exemption is claimed or by June 30. All leases must be for a term of ten years or more and recorded at the Bureau of Conveyances in order for the lessee to qualify for the home exemption.
  2. You must file Form 19-71 for the home exemption on or before December 31 preceding the tax year for first half payment or by June 30 for the second half payment.
  3. You have filed a State of Hawai‘i Resident Income Tax Return (N- 11 or N-13) within the last 12 months or have requested a waiver from this requirement for one of the following reasons: You are a new resident to the State of Hawai‘i and will file a State of Hawai‘i Resident Income Tax Return (N-11 or N-13) within the next 12 months or You are not required to file under State of Hawai‘i Income Tax Law and not required to file income tax in any other jurisdiction other than at the U.S. Federal level and understand that you are required to refile this waiver every three (3) years.

Single Home Exemption

The law allows just one home exemption for any taxpayer. A husband and wife shall not be permitted exemption of separate homes owned by each of them, unless they are living separate and apart, in which case they shall be entitled to one exemption, to be apportioned equally between each of their respective homes.

Home Exemptions for 60 Years of Age or Over

  • For those aged 60 to 69, the exemption amount is $80,000.
  • For those 70 and older, the exemption amount is $100,000.
  • To obtain the $80,000 or $100,000 exemption, the claimant must be 60 or 70 years of age on or before December 31, preceding the tax year.

If You Sell, Rent or Buy Another Home

If changes occur in the use of your home, such as renting, conducting a business or you no longer occupy the home, you must report such changes to the Tax Office. These changes will affect your exemption.

If You Recently Purchased a New Home It is Important to File a New Claim for Exemption.

You will not qualify for the exemption that was filed by the seller of the property nor will a claim be transferred from your former residence, if you had one.

Good news! Once filed and granted, a home exemption does not have to be re-filed annually as long as all requirements continue to be met. However, any person who has been allowed an exemption, has a duty to report to the assessor within thirty days after qualification for such an exemption ceases.

To learn more, here is additional information regarding Hawaii property taxes. As you are looking for available homes, allow LUVA Real Estate to assist you by setting you up on a “listing alert” to have property information in your price range and location emailed to you as soon as it comes on the market. With homes only lasting 22 days on the market in West Hawaii right now, having this information as soon as it appears is important. Contact us today and we can get your information.