Hawaii has one of the lowest property tax rates in the nation. Hilo on the Big Island is no exception, which can be an unexpected advantage for families considering a move from the mainland.

The effective property tax rate in Hawaii County is about 0.30% based on the median, which is less than a third of the national median of 1.02%. With the median home price in Hilo around $412,000, the annual property tax is estimated to be roughly $1,300 to $1,600. However, for investment properties that are not owner-occupied, the tax rate brackets differ, so separate verification is necessary.

Home insurance premiums are often higher than those on the mainland, contrary to the tax rates. This is due to the risks associated with hurricanes, earthquakes, and the unique lava flow zones (lava zones) on the Big Island. Some areas in Hilo are classified as high lava risk zones, which can lead insurers to either refuse coverage or significantly raise premiums, commonly resulting in costs ranging from $1,800 to $2,500 annually.

Maintenance costs are realistically higher than on the mainland due to the need to import materials and labor from outside the island. This can amount to about 1.5% to 2% of the home value, translating to annual costs of $6,200 to $8,200. The humid climate also leads to ongoing costs for termite and wood decay management.

When combining property taxes, insurance premiums, and maintenance costs, the total annual ownership costs range from $9,300 to $12,300. It's important to note that judging Hawaii's housing costs solely based on tax rates can lead to significant discrepancies in actual expenses.

Hawaii County offers a basic exemption of $40,000 for owner-occupied homes (Homeowner Exemption), and residents over 60 may receive additional exemptions based on age. If you plan to settle in Hilo, registering your owner-occupied status with the county's property tax office is a crucial first step to saving on taxes.

Even within Hawaii, the effective tax rate in Honolulu County is 0.28%, similar to Hilo, but the home prices are much higher, resulting in a significantly larger absolute tax amount. It's essential to develop a habit of comparing regions based on total ownership costs rather than just tax rates.