Property Owners Face Penalties: Second Installment of Real Property Taxes Due February 20th
The deadline for remitting the second installment of real property taxes for the 2025-2026 tax year is fast approaching. Property owners across the City and County of Honolulu must ensure their payments are submitted by Friday, February 20th, as outlined by the Department of Budget and Fiscal Services. Failure to meet this deadline will result in immediate financial penalties and could lead to further legal action, impacting the financial stability of businesses and investment portfolios.
Who's Affected
Real Estate Owners
This requirement directly impacts all individuals and entities holding real property within the City and County of Honolulu. The second installment of your real property tax bill, covering the period from January 1, 2026, to June 30, 2026, needs to be paid by the February 20th deadline. Missing this date incurs a penalty of 10% of the unpaid tax amount, plus interest calculated from the original due date. For landlords, this means ensuring that any property management fees or tenant rental income collections adequately cover this obligation to maintain clear title and avoid liens.
Small Business Operators
For small business operators who own their commercial or industrial properties, timely payment of real property taxes is critical for uninterrupted operations. An outstanding tax bill can lead to penalties that increase operating costs. Furthermore, unaddressed tax delinquencies can result in tax liens on the property, complicating future financing, sale, or even jeopardizing the business's ability to operate. Businesses relying on clear property titles for loans or leases must prioritize this payment.
Investors
Investors with real estate holdings in Honolulu, including those with multiple properties or those managed by third parties, need to be vigilant. The 10% penalty for late payment directly erodes investment returns. For investors in commercial properties, understanding that tenants may face similar pressures can inform lease negotiations and risk assessments. Ensuring that all tax obligations are met proactively prevents unexpected costs and maintains the asset's marketability and financial integrity. Delinquent taxes can also trigger more severe actions from the county, such as tax sales, which could lead to the loss of the asset.
Second-Order Effects
Delinquent property tax payments and associated penalties can ripple through Hawaii's unique economic ecosystem. When property owners face financial strain due to tax defaults, they may be forced to delay or reduce essential maintenance and improvements on their properties. This can lead to a decline in property quality and potentially impact neighborhood aesthetics and property values. For businesses, increased operating costs due to penalties can reduce their capacity to invest in expansion, hire staff, or offer competitive wages, thereby affecting local employment. Furthermore, a perception of increased financial risk associated with property ownership in the county could deter new investment, slowing down development and economic growth, especially in a market where real estate is a significant economic driver.
What to Do
Act Now: Property owners must remit the second installment of their real property taxes by Friday, February 20th. Failure to do so will trigger a 10% penalty on the unpaid amount, plus interest. Ensure payment is processed and received by the City and County of Honolulu's Department of Budget and Fiscal Services before the deadline to avoid incurring these additional costs and potential legal complications.
Action Details:
Real Estate Owners, Small Business Operators, and Investors should prioritize submitting their tax payment immediately if they have not already done so. Payments can be made online through the City and County of Honolulu's official payment portal, by mail, or in person at the Department of Budget and Fiscal Services. Confirm receipt of your payment by checking your account status online or by obtaining a confirmation receipt if paying in person. Proactive payment by February 20th is the only way to avoid the 10% penalty.
