The September 30th deadline to file for a Kauai real property tax homeowner’s exemption for the upcoming taxable year is quickly approaching.  A home exemption may result in significant savings by reducing the County assessed value of your primary residence.  Various home exemptions on the County of Kauai include:

  • Basic home exemption: Homeowners (or Lessees of Record) up to 60 years old are eligible for a single home exemption of $160,000.
  • Additional age exemption: Homeowners between 60 and 69 years old are eligible for an additional exemption, increasing the basic exemption to $180,000, and $200,000 for those over age 70.
  • Additional home exemption based on income: Homeowners that qualify for a basic home exemption may also be eligible for an additional $120,000 exemption if their annual gross income does not exceed the 2013 qualified gross income ceiling of $56,000. If the total amount of exemptions meets or exceeds the net taxable assessment for 2014, then the minimum tax assessed shall be $50 in year 2014 or $75 in subsequent qualified years.
  • Home preservation limit: A homeowner who meets certain strict criteria and is subsequently approved could potentially pay real property taxes equal to 3% of his or her total gross income or $500, whichever is higher.
  • Disability exemption: An exemption of up to $50,000 is available to homeowners who are completely blind or deaf or who have Hansen’s disease.  This exemption is in addition to the basic and multiple home exemptions.
  • Totally disabled veteran exemption: If you are a totally disabled veteran due to injuries sustained while on active duty with the U.S. Armed Forces, your home is exempted from all real property taxes, except for the minimum of $100.

Applications for the homeowner’s exemptions are available for download from the County website at www.kauaipropertytax.com; or they can be picked up at the Real Property Assessment office (808.241.4224) located in the Lihue Civic Center.

Current real property tax rates for the fiscal year beginning July 1, 2014 to June 20, 2015 are as follows:

Kauai real property tax changes for 2014 include a “Tax on Use” regulation.  For example, a 65 year old homeowner with a Princeville property assessed at $1,000,000 would be taxed at $2,501 per year if it was used as an owner-occupant / primary residence, $6,050 per year if used as a 2nd home or long-term rental, and $8,850 per year if used as a vacation rental.  Further Kauai real property tax changes for 2014 saw the removal of the “Permanent Home Use Cap”, a 2% cap on the increase of real property taxes per year for owner-occupant properties, replaced by the increased home exemptions listed above.

These changes have created quite an unexpected tax burden for some homeowners on Kauai, becoming a hot topic of discussion throughout the community and in the Garden Island Newspaper.   Additional Kauai County Council meetings have been scheduled to further evaluate and possibly implement new tax rates.

Overall, Kauai’s real property taxes are considered reasonable compared to many other counties and states. As the beneficiary of nearly half of every real property tax revenue dollar received, the County of Kaua’i could not operate without this vital source of income.

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