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Taxes in Hawaii
From high income taxes and limited estate taxes to very low property taxes and broad retirement income exemptions, Hawaii’s tax structure blends high costs with key retiree-friendly offsets.
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At a glance:
- Hawaii has some of the highest state income tax rates in the country, but this is offset by one of the lowest property tax burdens nationwide and exemptions on Social Security and most retirement income.
- Retirees benefit from relatively low property taxes and generous homestead exemptions, though higher overall living costs and sales-equivalent excise taxes still impact affordability.
- The state also imposes an estate tax on larger estates, even though it does not have an inheritance tax.
Residents in Hawaii endure higher-than-average income tax rates, but they are offset by gloriously low property taxes. Below, we explain various Hawaii state taxes affecting retirement income, such as sales tax, inheritance tax, and property taxes.
For information regarding taxes in other states, see Retirement Taxes by State.
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Hawaii Tax Rates
| State Sales Tax | 4.5% |
| Avg State/Local Sales Tax | 4.5% |
| Gas Tax | $0.185 per gallon |
| Diesel Tax | $0.185 per gallon |
| Cigarette Tax | $3.20 per pack |
| Income Tax | 11% |
| Effective Tax Rate | 8.46% |
| Property Tax | 0.26% |
| Social Security Tax | None |
| Medical/Dental Deduction | None |
| Federal Income Tax Deduction | None |
| Retirement Tax | Partial |
Hawaii Tax Rates Explained
Hawaii Sales Tax
Hawaii has no sales tax but charges a General Excise Tax (GET) of 4%. Local governments may charge separate sales tax and one or more special district taxes or mass transit tax. Combined GET rates in Hawaii range from 4% to 4.5%. Prescription medications are tax-exempt, but you’ll pay sales tax on prescribed medical devices and all other sales, including groceries.
Hawaii Income Tax
For higher-income residents, The Aloha State levies a steep income tax rate of 11%. Most others will pay around 9%.
Hawaii Property Taxes
The average effective property tax rate in Hawaii is 0.26%. The median home value is the highest in the nation at $690,000. However, the property tax on this assessed value is only $1,794.
Personal property such as cars or boats remains exempt from property tax, while real property and land are assessed at 100% of their fair market value. Property taxes are administered by the four counties and vary by location. In 2025, the standard homestead exemption has increased, with Honolulu County offering a $120,000 exemption for homeowners under 65 and $160,000 for those 65 and older. On the Big Island and Maui, homeowners can now claim a $300,000 exemption, provided they meet residency requirements. Seniors in Honolulu may claim double the exemption if aged 65 or older, further reducing their taxable property value.
Additionally, disabled veterans in Kauaʻi County may qualify for special property tax relief programs. These updates aim to ease the tax burden on residents and ensure fair assessments across the state.
The state offers a household renters credit to help taxpayers who meet income limits offset rental costs.
See the website for the Hawaii county of your choice to learn more about property taxes.
Hawaii Retirement Taxes
Social Security benefits are exempt. Military, government, and private pensions and employer-sponsored plans are 100% exempt from income tax if the employee made no contributions to the plan. If the employee contributed to the plan, such as a 401(k) with employer matching, only employer contributions are exempt.
Hawaii Inheritance and Estate Taxes
Hawaii’s estate tax rate ranges from 10% to 20% on estates above $5,500,000. Hawaii has no inheritance tax.
For further information, visit the Hawaii Department of Taxation.