Oahu Real Property Tax Due DatesPosted by Mike Bates on Sunday, April 22nd, 2012 at 10:55am.
Paying your real property taxes on time
A customer called me recently about a property tax bill they received from the City and County of Honolulu. This couple had bought their house in Kahala in December, 2011. In April, 2012 they received a delinquentcy notice with penalties and interest for their February property tax bill. They wanted to know why they never received a tax bill in January or February?
I called the Property Tax office to inquire. Here's their response:
- Oahu real estate sales are recorded by the State of Hawaii.
- Property taxes are assessed and collected by the City and County of Honolulu.
- It can take 2-3 months from the time the sale records to the time the sale records to the time the City and County of Honolulu is notified of the transfer in ownership.
- The owner is responsible for paying real property taxes on time, whether or not a bill is received.
The property tax office sends its February installment tax bills in mid-January. The time from the recording of the sale to the tax billing was about a month and the City might not have been notified of the change in ownership. There's a possibility the prior owners received the tax bill and ignored it.
Paying property taxes with your mortgage payment
Many owners automatically pay their real property taxes as an inclusion with their mortgage payment. Mortgage companies can setup an "impound account" and collect property taxes each month, then remit them to the City and County. Not all mortgage companies do this though, take a look at your mortgage statement to be sure.
Getting back to this couple with the delinquent tax bill, the bottom line is that they had to pay the penalties and interest with their taxes. At least the City and County has their tax billing information and they should receive all their future tax bills on time.
An owner can elect to pay the entire year's tax bill at one time and then have a year to wait until the next bill. The City and County of Honolulu's fiscal year begins on July 1st and ends on June 30th. The first tax bill (of the fiscal year) is due on July 20th. When you receive that bill, pay the whole thing off if you choose.
If you decide to sell your home, the escrow company will prorate your real property taxes and return the amount you (the owner) prepaid. You won't lose out on any money by prepaying your property taxes, except the opportunity cost of using it for six months. With today's interest rates, what's the difference? Might as well pay the entire bill in July if you have the extra cash.