Hawaii

NOTE: This section is currently being updated, the information presented here may be different than the current laws.

For the complete text of Hawaii statutes please refer to the Hawaii Revised Statutes. For other property tax information please refer to the Hawaii Department of Taxation.

Property Classification:

Property taxes in Hawaii are administered by the counties. The land in each county is classified, upon consideration of its highest and best use, into the following general classes: (HRS Sec. 246-10 ):

(1) single-family and two-family residential property;

(2) three or more family residential, apartment, hotel and resort property;

(3) commercial property;

(4) industrial property;

(5) agricultural property; and

(6) conservation property

Districting and classification of lands: There shall be four major land use districts in which all lands in the State shall be placed: urban, rural, agricultural, and conservation. The land use commission shall group contiguous land areas suitable for inclusion in one of these four major districts. (HRS 205-2)

Agricultural districts shall include activities or uses as characterized by the cultivation of crops, orchards, forage, and forestry ... (205-2(a))

Conservation districts shall include areas necessary for protecting watersheds and water sources; preserving scenic and historic areas; providing park lands, wilderness, and beach reserves; conserving indigenous or endemic plants, fish, and wildlife, including those which are threatened or endangered; preventing floods and soil erosion; forestry [...] and other permitted uses not detrimental to a multiple use conservation concept. (205-2(d))

Tree Farm Property

For valuation and assessment purposes "tree farm property" is considered agricultural property.

Eligibility - Any property of not less than 10 acres: (1) Included within an "agricultural district" pursuant to section 205-2; or (2) Included within the "conservation district" and zoned for commercial forest use is eligible for classification as tree farm property if it is suited for the raising of commercial tree species and other forest products in quantity sufficient to establish a business in the sale thereof. (HRS. 186-2)

Property on which the owner is already growing trees of commercial species and other forest products in quantity sufficient to establish a business in the sale thereof under good forestry management practices and which the owner agrees to manage in accordance with a management plan approved by the Board of Land and Natural Resources is eligible for classification as tree farm property. Additional noncontiguous property of five acres or more, under the same ownership and in the same vicinity, is also eligible for classification along with the main acreage sought to be classified. No real property under a lease having an unexpired term of less than twenty years is eligible for classification as tree farm property.

Application - The owner of any property which complies with the requirements specified in section 186-2 may apply to the board for classification of the owner's property as tree farm property. The application must comply with rules adopted by the Department of Land and Natural resources and shall include any additional information required by the board. The application must be signed by all persons having an interest in or holding any encumbrance upon the property and shall state that all of them will comply with the management plan upon its approval. (HRS. 186-3)

All public hearings required by statute or rules of the department shall be held before any management plan is approved. The management plan shall be available to the public not less than thirty days before approval. Notice of its availability shall be published in the bulletin of the office of environmental quality control. The plan shall be reviewed periodically by the board or its employees or authorized agents at intervals of no more than every five years. The review shall determine whether the owner has met the objectives in the management plan. The board may approve or require in consultation with the landowner alteration of the management plan to adapt to current conditions.

Classification - If the board finds that the property identified in the application is suited for the raising of commercial tree species and other forest products in quantity sufficient to establish a business in the sale thereof, and that the use will not have a significant negative effect on a native forest ecosystem, the property may be classified by the board as tree farm property. (HRS. 186-4)

Agreement with owner - Upon classification, the board shall be responsible for preparing, executing, and administering an agreement with the applicant and others having an interest in or encumbrance upon the tree farm property. The agreement shall be for a period of not less than 20 years and contain the following conditions: (HRS. 186-5)

(1) The agreement shall be canceled and terminated and the tree farm property shall thereby be declassified if, upon investigation, the board determines that the owner of the property is not complying with this chapter or the management plan;

(2) Any owner of tree farm property desiring to withdraw all or part of the property from the operations of this chapter may at any time make written application to the board;

(3) The owner shall develop and maintain trees of commercial species and other forest products as specified in the management plan.

Development and maintenance of tree farm property - The applicant must implement the tree farm management plan according to the schedule set forth in the plan. If the board determines that a satisfactory crop has not been established within the schedule set forth in the management plan, the property shall be declassified from its status as tree farm property. (HRS. 186-6)

Additional lands. An owner of land may at any time apply to the board to have more acreage classified as tree farm property subject either to a new agreement or to the original agreement. (HRS. 186-11)

Right to harvest - The owner of land shall have the right to harvest new trees generated according to a management plan approved by the department on lands within the agricultural district as provided by section 186-2, or on degraded forest and pasture lands within the conservation district and zoned for commercial forest use as provided by section 186-2; provided that this right shall be subject to the power of the State to protect health, safety, and welfare. (HRS. 186-5.5)

Degraded forests means areas which have had considerable disturbance, are altered from their natural state, and contain less than twenty per cent crown canopy of native tree species.

Rollback Tax - A deferred or roll back tax shall be imposed on the owner of agricultural lands assessed according to its agricultural use in the event of a change in land use classification to urban or rural districts or upon the subdivision of the land into parcels of five acres or less, provided that the tax shall not apply if the owner dedicates the land as provided in section 246-12 within three years from the date of the change in land use classification and fulfills all of the requirements of the dedication. The deferred or roll back tax shall be based on the difference in assessed value between the highest and best use and the agricultural use of the land, at the tax rate applicable for the respective years. (HRS. 246-10)

Dedicated Lands (HRS 246-12)

A special land reserve is established to enable the owner of any parcel of land within an agricultural district, rural district, conservation district or any urban district to dedicate for a period of 10 years, land for a specific ranching or other agricultural use and to have the land assessed at its value in such use.

If the land is located within an urban district the land dedicated must be used for:

The cultivation of crops such as sugarcane, pineapple, truck crops, orchard crops, ornamental crops, or the like;

A specific livestock use such as feedlots, calf raising and like operation in dairy, beef, swine, poultry and aquaculture, but excluding grazing or pasturing; or

A tree farm operation

Land situated within an agricultural district may be dedicated for a period of 20 years and shall be taxed at 50% of its assessed value in such use. Land situated within a conservation district and classified by the state as tree farm property may be dedicated for a period of 20 years and taxed at 50% of its assessed value in that agricultural use.

Valuation and Assessment:

In determining the value of lands which are classified and used for agriculture, consideration shall be given to rent, productivity, nature of actual agricultural use, the advantage or disadvantage of factors such as location, accessibility, transportation facilities, size, shape, topography, quality of soil, water privileges, availability of water and its cost, easements and appurtenances, and to the opinions of persons who may be considered to have special knowledge of land values. (HRS. 246-10)

The following is the tax rates for land classified as agricultural for each of the counties.

Real Property Tax Rates: 2003 (Fiscal Year Ended June 30)
County	Land Class	Tax Rate per $1,000 Net Taxable Land
Honolulu	G / 5 / Agricultural	$9.89
Maui	F / 5 / Agricultural	$4.93
Hawaii	E / 5 / Agricultural	$9.85
Kauai	F / 5 / Agricultural	$7.95

Severance or Yield Tax:

The state of Hawaii does not have a severance or yield tax on timber or timber products.