The City and County of Honolulu offers a special tax credit to homeowner occupants on Oahu. The credit is available to homeowners in certain situations.
Eligibility Criteria:
- Real Property Tax home exemption must be in effect when the credit is applied for. If your property doesn't already have the home exemption, you'll need to apply for the exemption and wait another year to apply for the credit. With the home exemption in effect the following year, you may apply for the property tax credit.
- Owner(s) cannot own any other real estate, anywhere.
- Combined income of all titleholders cannot exceed $60,000.
- None of the taxpayers have violated Revised Ordinances of Honolulu Section 8-13.5 (Penalties relating to the County Tax Credit) by filing a false application or attesting to any false statements with the intent to defraud the city or evade the payment of real property taxes.
Amount of the Credit
The tax credit figure is equal to 3% of total income for all qualified homeowners. Property tax in excess of the 3% figure is the credit amount. If the calculated credit amount exceeds the homeowners' annual property tax, then the credit is zero. In other words, the credit applies only when the owners' annual property tax exceeds 3% of their income.
How the Credit is Administered
The City and County of Honolulu assigns the tax credit to your property taxes for the following year. When the property tax bill for the following fiscal year (July 1, 2023 to June 30, 2024) arrives in the mail, it will reflect the credit and show the net property tax due.
How to Apply for the Real Property Tax Credit
The Real Property Tax office issues the form on July 1st of each year. Applicants must obtain and submit the application no later than September 30, 2022. Move quickly, at the time of this posting we less than a month remaining until the deadline!
Penalties
- Filing a false application for the credit may result in a criminal fine of up to $2,000.
- Homeowners who have obtained the tax credit who are no longer eligible (e.g. took title to another property) should notify the City and County of Honolulu within 30 days. Failure to notify the City is punishable with a fine of $200.
If you Plan to Sell Your Home
Please be aware the credit is applicable as long as you own the home. If you sell the property during the fiscal year for which the credit applies, the prorated credit (for the time you sell until June 30th) is removed and the balance will be payable to the real property tax office. An easier way to think of it - if you anticipate selling between July 1, 2023 and June 30, 2024, then plan on paying a portion of the credit back to the City and County of Honolulu OR don't apply for the credit in the first place.
Where to get the Tax Credit Application Form
If you qualify for the tax credit, don't miss out! This is a great credit for Oahu homeowners who aren't highly compensated and for elderly homeowners. Download the Oahu Property Tax Credit form here.
For additional information, call the Honolulu's Real Property Tax Office at (808) 768-3205.
Aloha, Mike
Mike Bates (Realtor Associate)
RS-54129
Century 21 iProperties Hawaii
1585 Kapiolani Blvd #1533
Honolulu, HI 96814
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