Most Maui homeowners will pay the same or less in property taxes starting July 1 under new rates approved unanimously Monday by the Maui County Council. 

Mayor Richard Bissen had proposed increasing the rates across the board to help raise additional revenue, in large part to fund the ongoing recovery efforts from the Aug. 8 fires. 

But the council decided to lower or hold flat the rates for those who own and live in homes valued at less than $3 million. The decrease in revenue there is primarily offset by increases to non-owner-occupied homes and hiking taxes on bed-and-breakfast operations and short-term rentals that are also the owner’s primary residence.

Council member Yuki Lei Sugimura, who’s steering the overall budget process, told Civil Beat the changes were driven by a desire to hold down costs for locals.

In a statement Wednesday, Bissen said his administration supports the council’s amendments.

While the county has some of the lowest property tax rates in the country, it also has some of the most expensive real estate. The median price of a single-family home on Maui hit $1.3 million in April, according to the Realtors Association of Maui.

Property taxes account for about $586 million — nearly half — of the county’s revenue stream. Even after losing nearly 2,200 structures in the August fires, Maui County’s certified value for tax rate purposes still increased to $73.3 billion for the fiscal year ending June 30.

The council voted to slightly lower rates for owner-occupied homes to $1.80 per $1,000 of valuation from the current $1.90 for properties valued under $1 million. The mayor had proposed increasing that to $2 per $1,000 in value. 

The council chose to keep flat the $2 rate for homes worth from $1 million to $3 million. Bissen had proposed increasing that to $2.50 per $1,000 of value.

But those residents living in the most expensive homes on Maui will likely pay more next year. The council agreed with the mayor to raise the rates on properties worth more than $3 million to $3.25 per $1,000 of value, an 18% increase over the current rate of $2.75.

“We did the best we could, and obviously it’s not good enough for some people. I do hear the short-term renters’ response.”

Council member Tamara Paltin

The council was largely in line with the mayor’s proposed increases on investment properties and other homes whose owners don’t live in them. Their tax rates will jump to $8.50 per $1,000 from $8 for properties valued between $1 million and $3 million, and to $14 per $1,000 from $12.50 for properties worth over $3 million.

Tom Croly, who has owned a bed and breakfast in Kihei since moving to the island 22 years ago, cautioned the council against shifting too much of the property tax burden to the tourism industry.

Beyond how the rate increases will affect his business, he said that reservations are down overall. He said he only has two advance reservations at the moment, fewer than he normally has at this time of year.

“Irrespective of tax rates, we are in for a very rough year as far as visitors coming to Maui and spending their money here,” Croly told the council.

For short-term rentals, the council approved Bissen’s proposed rate hikes and new three-tiered structure. 

Instead of paying $11.85 per $1,000 of value, transient vacation and short-term rental owners will pay $12.50 for properties worth up to $1 million, $13.50 for those worth $1 million to $3 million and $15 for those over $3 million. 

This makes the property tax rate on short-term rentals now the highest of any category. Timeshares pay the second most at $14.60 per $1,000 of value, which was held flat as was the rate for hotel and resorts at $11.75. 

Council member Tamara Paltin told Civil Beat that the council took into account that many of the hotels, resorts and timeshares provided emergency shelter for months to the 13,000 people displaced by the fire in Lahaina.

“It’s not a normal year,” she said. “We did the best we could, and obviously it’s not good enough for some people. I do hear the short-term renters’ response.”

Community members also warned the council about the pending effect of eliminating about half of the island’s stock of vacation units by Jan. 1, 2026, as called for in a bill that Bissen put forward earlier this month.

Council members said after the meeting that the county is bracing for the major financial hit that taking several thousand short-term rentals out of the market and making them long-term rentals is expected to have. But that it was too early to start accounting for that.

“It’s super premature to try to make up that revenue,” Paltin said, noting that the bill has a long road ahead as it will be vetted first by the Planning Commission and then by the council.

She added that the county likely will have additional revenue coming back online after next year as properties in the burn zone, which were exempted from paying property taxes this year, start paying again.

The council plans to renew its work on the overall $1.7 billion county budget Tuesday, and has scheduled a second and final reading of the budget bill June 5.

See all the approved rates below.

Civil Beat’s coverage of Maui County is supported in part by a grant from the Nuestro Futuro Foundation.