Residential A

Classification

Ordinance 13-33 established the Residential A Classification on September 26, 2013, and applied to tax years beginning on July 1, 2014 and thereafter. Ordinance 13-41 soon followed to clarify technical aspects of vacant residential zoned land.

Under Revised Ordinances of Honolulu (2021) Section 8-7.1(c)(4), “Residential A” means a parcel, or portion thereof which:

1.   Is improved with no more than two single-family dwelling units; and

a.    Has an assessed value of $1,000,000 or more;

b.    Does NOT have a home exemption; and

c.    Is zoned R-3.5, R-5, R-7.5, R-10 or R-20  or is dedicated for residential use;

2.   Is vacant land zoned R-3.5, R-5, R-7.5, R-10 or R-20 and has an assessed value of $1,000,000 or more; or

3.   Is a condominium unit with an assessed valuation of $1,000,000 or more and does not have a home exemption.

Residential A excludes any parcel, or portion thereof, improved with military housing located on or outside of a military base.

On April 7, 2017, Ordinance 17-12 amended the single tax rate of the Residential A classification to a two-tiered rate system, and applied to tax years commencing on July 1, 2017 and thereafter.

The tiers are as follows:

1.    Residential A Tier 1 Tax Rate: applies to the first $1,000,000 net taxable value of the property; and

2.    Residential A Tier 2 Tax Rate: applied to the net taxable value of the property in excess of $1,000,000.

     Real Property Tax Calculations

Example 1, with home exemption

Total Assessed Value:                             $1,600,000

Home Exemption:                                      $120,000

Classification:                                          Residential

Tax Rate:                                        $3.50 per $1,000

                                                          net taxable

Total                                                  Net

   Value               Exemption              Taxable

$1,600,000    -     $120,000      =       $1,480,000

     Applying tax rate:

$1,480,000 ÷ $1,000 = $1,480 x $3.50

           Taxes = $5,180

Example 2, without home exemption

Total Assessed Value:                            1,600,000

Home Exemption:                                               $0

Classification:                                    Residential A

Tax Rate:

   Tier 1 (first $1M):                  $4.00 per $1,000

                                                      of net taxable

   Tier 2 (In excess of $1M):     11.40 per $1,000

                                                      of net taxable

   Total                                                          Net

   Value               Exemption                   Taxable

$1,600,000      -         $0         =           $1,600,000

Applying Tiered Tax Rates:

$1,000,000 ÷ $1,000 = $1,000 x $4.00 =   $4,000

$ 600,000 ÷ $1,000 = $600 x $11.40    =   $6,840

         Taxes =  $4,000 + $6,840 = $10,840