Owner Education / Property Taxes
Renting Out Your Honolulu Home?
What Happens to Your Property Taxes
Moving out and renting the place you used to live in changes your tax bill, sometimes by thousands a year. Here is what changes, what you have to report, and when.
The short answer
When you move out of your Honolulu home and rent it out, you lose the home exemption that was reducing your taxable value, which is $120,000, or $160,000 if you are 65 or older. You then have 30 days to report the change to the City. And if the property is assessed at $1,000,000 or more with no exemption on file, it can be reclassified from Residential into Residential A, where value above $1 million is taxed at $11.40 per $1,000 instead of $3.50. On a $1.2 million house, those changes together come to roughly $2,500 a year.
Key takeaways
- The exemption ends when you move out. The home exemption applies only to a property you occupy as your principal residence.
- Your taxable value rises. Nothing about the house changed, but the $120,000 deduction, or $160,000 from age 65, is gone.
- Higher-value properties can land in Residential A. Assessed at $1 million or more with no exemption on file, and meeting the ordinance's form and zoning test, value above $1 million is taxed at $11.40 per $1,000 instead of $3.50.
- You have 30 days to report the change. The clock runs from the change itself, and a $300 penalty attaches separately.
- Put the number in your rent-versus-sell math. On a $1.2 million house the combined effect is roughly $2,500 a year.
A lot of Oʻahu homeowners become landlords without ever setting out to. Orders come through for the mainland, a parent needs looking after, or you buy the next place and decide to hold on to this one. The house you lived in becomes the house somebody else lives in, and most of the transition feels manageable enough: a lease, a tenant, a manager if you want one.
Then the assessment notice turns up in December and the number is larger than you expected.
Honolulu taxes an owner-occupied home and a rented one on different terms. Most owners have thought about the state side, the General Excise Tax on rent covered in our guide to Hawaii rental property taxes. The county side gets less attention, and it is where the surprise comes from.
What changes when your home becomes a rental
Four things move at once, and only one of them is yours to act on.
Three happen by themselves. The home exemption ends, because it only ever applied to a property you occupied yourself. Your taxable value rises as a direct result, since the deduction that was coming off the top is gone. And losing that exemption is what opens the door to Residential A for higher-value properties, which is where the cost jumps rather than creeps.
The fourth is a duty rather than a consequence. You have 30 days to tell the Real Property Assessment Division that the use of the property has changed, and there is a penalty for missing it.
Residential, Residential A, and the home exemption
Three terms do most of the work in this article. If you have never had reason to learn them, here they are in plain language.
Residential
The standard property tax classification for homes and condominium units on Oʻahu. One rate applies to the entire assessed value: $3.50 per $1,000.
Residential A
A separate classification that can apply to a property assessed at $1 million or more when no home exemption is on file. It is not automatic. The property also has to fit the ordinance's description: a parcel with no more than two single-family dwelling units in one of the specified residential zoning districts (or dedicated for residential use), or a condominium unit. It is taxed in two tiers, $4.00 per $1,000 on the first $1 million and $11.40 per $1,000 on the value above it.
Home exemption
A deduction of $120,000 from the assessed value of a home you occupy as your principal residence, or $160,000 from age 65. It is also the switch that keeps a property out of Residential A: with the exemption on file, that classification does not apply no matter what the home is worth.
Those rates are for the 2026–27 tax year and are unchanged from the year before. The City Council adopts a schedule each June, so check the current figures against the official rate schedule before running your own numbers.
| Class | Rate per $1,000 of assessed value |
|---|---|
| Residential | $3.50 |
| Residential A, first $1,000,000 | $4.00 |
| Residential A, value above $1,000,000 | $11.40 |
| Bed & Breakfast Home | $6.50 |
| Transient Vacation | $9.00 to $800,000, then $11.50 |
One point catches owners who have read about the neighbor islands: Honolulu has no long-term rental classification and no discount for renting to residents. Maui County and Hawaiʻi County have one. On Oʻahu, a long-term rental is taxed as Residential or Residential A on the ordinary tests above.
What it actually costs
The abstract version of this is hard to feel, so here is the same change at three assessed values.
| Assessed value | Lived in, with exemption | Rented, no exemption | Difference |
|---|---|---|---|
| $850,000 condo | $2,555/yr | $2,975/yr Residential | +$420/yr |
| $1,200,000 house | $3,780/yr | $6,280/yr Residential A | +$2,500/yr |
| $2,000,000 house | $6,580/yr | $15,400/yr Residential A | +$8,820/yr |
Illustrative math using the 2026–27 rates and the $120,000 exemption, assuming the exemption was on file while the owner lived there. Your assessed value is set by the City, not by what you paid.
Spread across a year, the $1.2 million example is about $208 a month of additional carrying cost. That belongs in your rent-versus-sell arithmetic, and in your rent from the first day the property is listed. It is one of the quieter reasons a serious rental price analysis is worth doing: the rent has to carry the property you now own, not the one you used to live in.
What you have to report, and when
This is the part owners most often get wrong, usually because of a date quoted out of context.
The obligation is 30 days. Under ROH § 8-10.1(d), an owner must report a change in ownership, use or status within 30 days of the change, and renting out a home you had claimed as your residence is exactly that kind of change. You file it through the Real Property Assessment Division's change of status request.
November 1 is not a second deadline
RPAD also describes a $300 penalty that applies when a change occurring in the 12 months ending September 30 has not been reported by the following November 1. That date is when the penalty attaches, not an extension of your 30 days. If you rent the house out in February, your reporting window closes in March. November 1 is simply the point after which the City adds the penalty on top of removing the exemption.
The dates that matter
- Within 30 days of renting the property out. Report the change of status. This one is on you.
- September 30. The deadline to file a home exemption claim for the tax year beginning the following July 1. It matters in reverse too: if you move back in, this date governs when the exemption returns.
- On or before December 15. The City mails the Notice of Assessment with the value and classification your next bill is built on. A new Residential A classification shows up here first, so read it rather than filing it.
- January 15. The deadline to appeal to the Board of Review. Grounds include an assessment more than 10% above market value, lack of uniformity, or an exemption wrongly denied. The window is short, which is why December is the month to pay attention.
Situations that work differently
Renting a room while you still live there. If you rent out a room or part of the property and it remains your principal residence, the exemption stays intact. The rules above apply when you move out and rent the whole property.
Permitted short-term rentals. Registered bed and breakfast homes and permitted transient vacation units sit in their own classifications. If that is your situation, classification is one piece of a wider compliance picture we handle for short-term rental owners.
Dedication for residential use. Owners of property in apartment, business, industrial, resort, mixed-use or transit-oriented zoning can apply for a five-year dedication that secures residential treatment, with tenancies of 90 days or more and a September 1 deadline. It does nothing for an ordinary house in a residential district.
There is no vacancy or empty homes tax on Oʻahu. The most recent proposal died without a final Council vote.
For a typical long-term residential landlord, the items in this article are the main county property tax issues to plan around. Honolulu's code contains other classifications, dedications, exemptions and credits that apply in particular circumstances, so treat this as the common path rather than a complete map.
Frequently asked questions
What happens to my property tax if I rent out my Honolulu house?
You lose the home exemption, so your taxable value rises. You must report the change to the Real Property Assessment Division within 30 days. And if the property is assessed at $1,000,000 or more with no exemption on file, it can be reclassified as Residential A, taxed at $4.00 per $1,000 on the first $1 million and $11.40 above that.
What is Residential A in Honolulu?
A property tax classification that can apply to a home or condominium unit assessed at $1,000,000 or more with no home exemption on file, where the property also meets the ordinance's requirements on form and zoning: a parcel with no more than two single-family dwelling units in a specified residential district or dedicated for residential use, or a condominium unit. It is taxed in two tiers rather than at one flat rate.
Does Honolulu have a lower property tax rate for long-term rentals?
No. Unlike Maui County and Hawaiʻi County, Honolulu has no long-term rental classification or discount. A long-term rental is taxed as Residential, or as Residential A if it meets that classification's requirements.
Do I have to tell the City when I convert my home to a rental?
Yes. ROH § 8-10.1(d) requires an owner to report a change in ownership, use or status within 30 days of the change. A separate $300 penalty applies when a change occurring in the 12 months ending September 30 has not been reported by the following November 1.
When can I appeal my assessment or classification?
Between the Notice of Assessment, mailed on or before December 15, and January 15, to the Board of Review. Grounds include an assessment more than 10% above market value, lack of uniformity, or an improperly denied exemption.
Thinking about turning your Oʻahu home into a rental?
The tax change is one line in a larger calculation: what the property would actually rent for, what management and upkeep cost, and what you would net month to month. We put that picture together for owners before they commit, so the decision rests on real numbers. Our guides to renting out a house in Honolulu and renting out your home after a PCS cover the rest of the transition.
This article explains City and County of Honolulu real property tax rules in general terms, using rates and rules published by the Real Property Assessment Division for the 2026–27 tax year. It is not tax or legal advice for your situation. Confirm details with RPAD on (808) 768-3799 or with your tax professional.
