Kauai Real Estate Tax Update

Significant changes to the County of Kauai’s real property system are upon us and took effect on July 1, 2012.

Ordinance No. 920, the law mandating the changes, was passed in December of last year to provide for a fair, more efficient real property tax system.

One of the most significant changes pertains to properties that are owner-occupied and also have long-term affordable rentals (LTLs).

Under the new law, owners of this type of dual usage properties are now eligible for the homestead tax rate as well as the Permanent Home Use (PHU) tax cap.

To qualify, LTLs must be leased for one year or longer at levels that don’t exceed 80 percent of the Kaua’i median household income, which are established annually by the U.S. Department of Housing and Urban Development.

Applications for the new tax rate for dual usage properties must be submitted by September 30.

The following summarizes other major changes to Kauai’s real property tax system:

• Assessments will no longer be shown as separate land and building values, but rather as a single property value.  There will also be a single tax rate for each property class.

• Tax rates will be based on the actual use of the property while assessed values will continue to be based on highest and best use.

• The date of valuation is beling advanced from January 1 to October 1.

• The filing deadline for all exemptions is now September 30.

• All Ag and Historical property dedications must be filed by July 1.

• The additional exemption for low income was increased from $55,000 to $120,000.

To qualify for this exemption for tax year 2013, applicants must have a household gross income of $60,200 or less based on 2011 tax returns.

• The permanent home use cap was changed from a flat rate of two percent to the annual percentage change in the consumer price index-urban (CPI-U) for Honolulu.

• The apartment tax class was eliminated and a vacation rental class was added.

• The disputed valuation threshold for appeals will be lowered from 20 percent to 15 percent.  Appeal processing feels will be increased from $10 to $25 for owner-occupied properties and those filing appeals for all other properties will be charged a $75 fee.

For more information about the real property tax changes, call the county’s real property assessment office at 808-241-4224.  Also, check out and

Kauai Real Estate Services and Vacation Accommodations

If you are considering buying a home on Kauai you can see some of the island’s best real estate deals by browsing through the Coldwell Banker Bali Hai Realty Kauai Real Estate Galleries, or use the Map-Based Kauai Home Search.

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Also please feel free to give us a call. The Bali Hai Realty staff will be happy to help you find the perfect Kauai vacation rental or assist you in the process of buying or selling a Kauai home. We also offer the highest level of personalized Concierge Services to help you plan your Kauai vacation activities.

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