The Maui County Council is currently deliberating on revised real property tax rates, a decision that will significantly impact businesses and property owners across the island. The council recently heard oral and written testimony on the proposed changes, which include reduced rates in some categories, while other proposed rates remain unchanged. Final action on the tax rates and the fiscal 2026 budget is scheduled for June 3rd, 2025, marking a critical juncture for Maui's economic landscape.
Property valuations in Maui have been steadily increasing, a trend that is influencing the tax rates under consideration. According to a recent report by Maui Now, the county's assessment of properties is based on market values. With rising interest rates, these values have risen, potentially leading to higher tax bills for property owners. Maui County's net taxable value of real property was $73.3 billion for the last fiscal year, a 4.2% increase over the previous year; this indicates the scale of the financial implications tied to the tax rate adjustments.
For Maui's tourism and hospitality sectors, even small changes in property tax rates can have a considerable impact. A 2020 article in the Maui News highlighted that even a difference of $1 in the rates can equate to hundreds of thousands of dollars in property taxes, especially for hotels and resorts. The industry faces ongoing challenges related to reopening and maintaining safety protocols, making tax burdens a critical factor. The pending decisions underscore the delicate balance the council must strike to support economic recovery while ensuring sufficient revenue for county services.
Furthermore, the financial implications of these tax rates extend beyond the immediate impact on businesses and property owners. The Grassroot Institute of Hawaii recently published an article discussing the impact of reduced visitor arrivals which is projected to fall by 4% over the next two years, reducing visitor spending by $1.6 billion. This highlights that these tax rates impact not only property owners but the economic health of the island as a whole. Investors and entrepreneurs should closely monitor the council's final decisions, as these rates will influence both short-term and long-term financial planning.
The Maui County Department of Finance Real Property Assessment (RPA) Division will mail real property assessment notices to property owners. Property owners have the right to appeal. These notices will include the taxable value of land and any improvements, alongside exemptions and property classification. The deadline to file an appeal is April 9, 2025.
