Tax rates are the most significant concern while looking for a property because houses with high tax rates are simply not affordable. If you are looking for a place with a low property tax rate, then Maui County property tax rates are some of the lowest in the US.
The Maui property tax rates for the year 2020-2021 has now been released. Rates for the fiscal year July 1, 2020, to June 30, 2021, are shown below.
The owner-occupied tear rates are as follows:
For Tier 1: $2.51 (up to $800,000)
For Tier 2: $2.56 ($801,000 to $1,500,000)
For Tier 3: $2.61 (more than $1,500,000)
The non-owner-occupied tear rates are as follows:
For Tier 1: $5.45 (up to $800,000)
For Tier 2: $6.05 ($801,000 to $1,500,000)
For Tier 3: $6.90 (more than $1,500,000)
The tax rate for an apartment is $5.55
The tax rate for commercial area is $6.29
The tax rate for industrial area is $7.20
The tax rate for agriculture land is $5.94
The conversion tax rate is $6.43
The tax rate for the hotel and resort is $10.70
The timeshare tax rate is $14.40
The tax rate for the commercialized residential is $4.60
The short-term rental rate is $11.08
Maui Property Tax Rate varies from land to land. It is important to consider the property classification if you are planning to buy Maui real estate.
How Maui Property Tax Rates are classified
- The property tax rates are classified based on the highest and best use.
- Those properties classified as Homeowners or Owner Occupied that have been granted a homeowner exemption
- Properties that receive homeowner exemptions, permitted bed and breakfasts, condominiums, and permitted transient vacations are exceptions.
- Properties are classified based on their actual use. There are different tax rates for apartments, commercial areas, hotels or resorts, timeshares, and homeowners.
- Properties that offer a bed, breakfast, transient vacation rental, or a conditional payment to operate a transient vacation are classified as Commercialized Residential.
How to assess Maui property value
The method to assess the property value varies from state to state. Property assessments are made annually using the cost and market comparison approach. The most probable price that a property should bring in an open and competitive market is the fair market value.
It is the responsibility of the Real Property Assessment Division of the Department of Finance to locate, identify, and appraise the property at fair market value. Maui uses the mass appraisal technique to determine the fair market value. They take action to improve the methods of assessing property fairly and uniformly.
Mass Appraisal Technique
Mass Appraisal Technique, according to the International Association of Assessing Officers says, “It is a process of valuing a group of properties as of a given date and using common data, standardized methods and statistical testing.”
It analyzes the data collected in huge quantities, develops the statistics from the data, and then applies the result to a large number of properties. There are mainly three methods of the appraisal, including Comparison Approach, Cost Approach, and Income Approach. Maui uses this technique to assess property values and property taxes every year.
You may qualify for the homeowner’s exemption if you are an owner-occupant. The homeowner’s exemption is $200,000, which reduces the net taxable value and tax rate. A homeowner exemption provides tax relief for Maui residents that reduces the tax burden. It allows you to claim homeowner classification that provides lower rates. One must reside in a home for at least 270 days every year to meet the requirements for exemption. In addition, one must not rent the whole property at any given time.
How to calculate real property taxes
Obtain the net taxable value for the parcel and tax class under the Assessment Information. After that, obtain the tax rate from the budget ordinance. The tax calculation varies from tier to tier and differs with areas. Tax rates are calculated differently for Apartment, commercial, Agriculture, Industrial, Timeshare, Hotel and Resort, and Commercialized Residentials. Divide the total net taxable value by 1000 and multiply by the corresponding tax rates to calculate the real property taxes.
Important Dates to Keep in Mind
- The tax year begins on July 1 and lasts until June 30.
- Dec 31 is the deadline for filing ownership documents and exemption claims.
- Jan 1 is the assessment set for the next tax year.
- Assessment notice mailed on March 15.
- April 9 is the deadline to file tax appeals.
- August 20 is the first half-year tax payment due
- February 20 is when the second half-year tax payments due