NYTimes: Pricey Oahu Home, Low Tax
The newspaper looked at homes for under $1 million in three real estate markets. In Honolulu, buyers pay more and get less, but benefit from really low property tax rates.
Honolulu has made its way into a New York Times article that offers a comparative snapshot of what nearly a million bucks could buy in a trio of real estate markets.
The Times brought together comparative information on three homes listed at $950,000 to just under $1 million in Hudson, New York, Tucson, Arizona and Honolulu. The writer didn’t explain why he chose those three cities, or those specific homes, but the details provided about the homes are instructive.
In upstate New York, $950,000 can buy a five-bedroom 3,340 square-foot brick home with four and a half baths on the banks of the Hudson River. The three-story home has a gabled roof and stainless steel kitchen appliances, as well as a view of the Catskill Mountains, the Hudson River and a nearby lighthouse.
That same amount of money buys an even larger, modern home on a quarter-acre lot in a historic district near the University of Arizona in Tucson. There may be just two bedrooms, but that home is even larger than the five-bedroom home on the Hudson.
Here in Honolulu, for $998,000, the New York Times found a two-bedroom, two-and-a-half bathroom townhouse condo with access to communal pools and a tennis court in Kahala. The 1,473 square-feet condo is a fraction of the size of the detached single-family homes in the other two cities.
This highlights what we already know, that a similar amount of money buys a lot more house on most of the mainland — and that’s not including the $996 in monthly condo fees at the Honolulu townhouse.
So the most notable thing is the difference in property taxes for homes of the same value.
The owner of the home in Tucson will need to pay just over $8,000 per year and in New York the tax bill will be nearly $10,000 annually. The property tax on the pricier home in Honolulu, according to the article, is just $2,149.
The author doesn’t specify the origin of the tax bill on the Honolulu condo, although the amount matches the  linked to in the article. But the actual property tax bite on a typical $998,000 home in Honolulu is, depending on exemptions, around $3,000 — which is still a fraction of the annual cost of owning in those other markets.
Bottom line: if you want space, buy elsewhere. And if you want a real estate investment with comparatively very low property taxes, invest in Hawaii.
Civil Beat’s Living Hawaii series has previously explored the impact of property tax rates that draw plenty of non-resident investors to invest in the state’s high-priced real estate markets.
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