Understanding Maui’s Tiered Property Tax Changes The Maui County Council began considering a tiered tax rate system back in 2018. The tiered scheme for property taxes was initially proposed to increase income from second homes and investment properties, which many have said aggravates Maui County’s housing crisis. There was much media coverage and hearings over the next two years, ultimately passing two resolutions in December of 2019. A subsequent resolution provides a tax exemption for property owners with long-term rentals. However, it was not until property owners started receiving their revised tax bills in March that many questions were raised.
Change to tax classifications Previously, the classifications were: residential, apartment, hotel and resort, time share, commercial, industrial, agricultural, conservation, homeowner, commercialized residential and short-term rental. The new changes created additional categories of: owner-occupied, non-owner-occupied.
Establishment of tiers The changes establish “three equivalent or ascending tiers of tax rates.” These apply to the classifications for owner-occupied, non-owner- occupied, short-term rental, commercial and industrial. The tiered rates apply to three corresponding ascending or equal ranges of property values. The rates, tiers and value ranges are set in the annual budget.