First-time buyer guide for Oahu

Fee simple vs leasehold

Fee simple means you own the home and the land under it. Leasehold means you own the home (or the unit) but lease the land, usually from a landowner or trust, for a set term. Leasehold properties are labeled "leasehold" when they are advertised for sale. Hawaii's real estate rules require that label.

What to look at in a lease

• Lease rent. What you pay the landowner, how often, and when and how it can change. Some leases fix the rent for a period and then reset it on a set date or formula.
• Remaining term. How many years are left, and whether the lease can be extended.
• Renewal risk. What happens when the term ends or when the rent is reset. Terms vary a lot from lease to lease, so read the recorded lease and any amendments, not a summary of them.
• Lender issues. Many lenders have their own rules for leasehold loans, such as how long the lease must run past the loan term. A short remaining term can limit your financing, and later, a future buyer's financing. Ask your lender about the specific property early.

Leasehold and property tax

The City and County of Honolulu assesses real property "in its entirety," which it interprets as the fee simple value, even when you own a leasehold interest. The assessed value can therefore be well above what you pay for a leasehold home. See the property tax section below.

Sources: Hawaii Administrative Rules §16-99-11(d); Honolulu Real Property Assessment Division FAQ.

Next step: Found a leasehold home? Send it to us and ask for help listing the lease questions to put to an attorney and your lender. Contact Marcus Suzuki (R), Aloha American Realty, Inc.

Condos and association dues

When you buy a condominium unit you also join the owners' association. You pay regular dues (often called maintenance fees or HOA fees) toward the shared costs. Some single-family neighborhoods have associations too, so ask for their documents as well.

What dues usually cover

It varies by building. Dues commonly go toward upkeep of common areas, the association's master insurance policy, management, and contributions to reserves. Some projects also include items such as water or trash. The budget shows what is and is not included.

Reserves and the reserve study

Reserves are money the board collects regularly to pay large future costs, such as a roof, elevators or other common areas. A reserve study estimates when major parts of the building will need replacing and how much is set aside for them. The state's Real Estate Branch notes that insufficient reserves can lead to special assessments, borrowing, or deferred repairs, and that a recently updated reserve study is often a sign of responsive management. A newer building may not have built up much in reserves yet.

Reading the budget and financials

• Ask for the current budget and the reserve study or reserve summary.
• Ask for recent financial statements and when the last audit was done.
• Read recent board minutes for repairs, disputes or lawsuits under discussion.
• Read the declaration, bylaws and house rules, with all amendments, for pet, rental and use rules.
• Look at the insurance line, the management company, and whether any owners are far behind on dues.

Special assessments

A special assessment is a one-time charge to owners on top of regular dues, used for a large expense. Ask the seller and the association whether any are planned or pending. Hawaii law generally limits how far a board can go over its adopted annual operating budget without owner approval, except in emergencies, but large repairs can still lead to an assessment. Lenders also look at an association's finances when you finance a condo, so the budget can affect your loan too.

Sources: Hawaii Real Estate Branch, "Thinking of Buying a Condominium?" and Condominium Governance FAQs; HRS §514B-148.

Next step: Interested in a condo? Ask us to help you request the association documents and go through the budget with you. Request a call.

Property tax

Property tax on Oahu is set by the City and County of Honolulu. The Real Property Assessment Division values each property, and the Treasury Division sends the bills. The figures below are from the City's own pages and apply to fiscal year 2026-27 (July 1, 2026 to June 30, 2027). Rates are set by the City Council each year, so check the current ones.

How it is calculated

Property is valued at 100% of market value, and the assessment date is October 1. Your taxable value is the assessed value minus any exemption. The tax is the taxable value divided by 1,000, times the rate for your property's tax class. Assessment notices go out by December 15, and the deadline to appeal is January 15. The minimum annual tax is $300.

Tax classes and rates

The City taxes property by class, based on how it is used. The classes are residential, hotel and resort, commercial, industrial, agricultural, preservation, public service, vacant agricultural, Residential A, bed and breakfast home, and transient vacation. For a home you live in, the two that matter most are these:

A home, condo unit or vacant lot is classed Residential A when it has an assessed value of $1,000,000 or more and no home exemption (with limited-use conditions set out in the City ordinance). Transient vacation rentals and bed and breakfast homes are separate classes with different rates.

The home exemption

The home exemption lowers the taxable value of the home you live in. For 2026-27 it is $120,000, or $160,000 if you are 65 or older. It is scheduled to rise to $140,000 and $180,000 starting July 1, 2027. To qualify you generally must own the home and occupy it as your principal home as of October 1, have your ownership recorded by September 30, and file the claim by September 30. A claim filed by then applies to the following tax year. Only one home exemption is allowed per taxpayer, and a home held in an LLC does not qualify.

A seller's exemption does not transfer to you. You file your own claim. If the seller's exemption is still in effect, you may be treated as holding it for the current tax year, and you file for the next. If you buy a Residential A-range home after September 30, you may be taxed at the Residential A rates until your exemption takes effect, so ask about this early.

The City's own example

For a home assessed at $1,600,000: with a $120,000 exemption in the Residential class, the tax is ($1,600,000 − $120,000) ÷ 1,000 × $3.50 = $5,180. Without an exemption, in Residential A, it is $4,000 on the first $1,000,000 plus $6,840 on the other $600,000, for $10,840. Your own bill depends on your property's assessed value, class and exemptions.

Bills and due dates

The tax year runs July 1 to June 30. Bills are mailed around July 20 and January 20 and are due August 20 and February 20, in two equal installments. Late payments are penalized, so ask your lender whether taxes are collected through escrow.

Sources: Honolulu Real Property Assessment Division (home exemption, FAQ, Residential A pages); Council Resolution 26-62; Honolulu Treasury Division. Links are listed at the end of this guide.

Next step: Looking at a home over $1,000,000? Ask us to point you to the assessment record and the exemption steps for the home you are considering. Contact Marcus Suzuki (R), Aloha American Realty, Inc.

Insurance

Your lender will usually require property insurance before closing, and some kinds of coverage take time to arrange. Get quotes during your inspection period, so the cost is part of your budget and approval. The Hawaii Insurance Division, part of the state Department of Commerce and Consumer Affairs, publishes consumer guides.

Homeowners insurance

A homeowners policy typically covers the home, other structures, your belongings and liability for accidents, subject to the policy's exclusions and deductible. Read the exclusions, and ask whether the policy pays actual cash value or replacement value.

Condo insurance (HO-6)

For a condo, the association's master policy generally covers the building structure and common areas, and your own HO-6 policy covers your unit's interior, your belongings and your liability. Many associations have large deductibles that can be charged to owners, depending on the governing documents. Ask whether your HO-6 policy includes loss assessment coverage, and read the association's insurance summary.

Hurricane

Standard homeowners policies do not always cover hurricane wind damage. A hurricane policy or endorsement can add that coverage. Ask how your policy decides when hurricane coverage applies (many tie it to a watch or warning period), what the deductible is, and whether it has a waiting period.

Flood

Standard homeowners and condo policies generally do not cover flood damage. Flood insurance is a separate policy, available through the National Flood Insurance Program (NFIP) and some private insurers. NFIP policies generally have a 30-day waiting period before they take effect, with some exceptions, so ask your agent about timing. Lenders require flood insurance for buildings in a federally designated flood zone when the loan is federally regulated or backed. You can also buy it outside those zones, since flooding can happen anywhere.

Sources: Hawaii Insurance Division, "My Insurance Doesn't Cover What?"; Real Estate Branch, "Types of Condo Insurance Policies"; FEMA lending and insurance page.

Next step: Ask us what to ask an insurance agent before you write an offer, then talk to a licensed agent for your quote. Request a call.

Flood and hazard zones

FEMA flood zones

FEMA's flood insurance rate maps sort land into flood zones. The zones A, AE, AEF, AH, AO, V and VE are Special Flood Hazard Areas, the higher-risk zones. The City and County of Honolulu's Department of Planning and Permitting says updated Oahu flood maps took effect on June 10, 2026, so a property's zone may differ from what older listings or past owners were told. Properties newly mapped into a Special Flood Hazard Area may have a lender flood insurance requirement. FEMA has a process (LOMA and LOMR) to ask for a change to a flood zone determination, if you believe a mapping is wrong.

Tsunami evacuation zones

The City's Department of Emergency Management maps tsunami evacuation zones. The Primary zone (red) is evacuated for most tsunami warnings. The Extreme zone (yellow) is added when an Extreme Tsunami Warning is issued. Look up the zone for any home you are considering.

What about lava zones?

Lava-flow hazard zones are mapped by the U.S. Geological Survey for the Island of Hawaii (and a separate map for Maui). They are not part of buying on Oahu. On Oahu, use the flood and tsunami tools below.

Where to check an address

• Honolulu Department of Planning and Permitting: FEMA flood insurance rate maps, with a link to the City's map viewer.
• FEMA Flood Map Service Center for the effective flood map by address.
• Hawaii Flood Hazard Assessment Tool (State). It shows FEMA flood zones, and does not show all flooding.
• Oahu Hazard Explorer and the City tsunami information page for tsunami evacuation zones.

A map is a starting point. Ask the seller about past water intrusion, read the seller disclosure statement, and ask your inspector and insurance agent what they see at the property.

Sources: Honolulu DPP; Honolulu Department of Emergency Management; Hawaii FHAT; USGS; FEMA.

Next step: Pick a home you like? Ask us to run through the flood and tsunami zone checks with you before you offer. Contact Marcus Suzuki (R), Aloha American Realty, Inc.

From offer to closing

The steps below overlap, and the exact dates are written into your purchase contract. Read every deadline.

1. Offer.You make a written offer on a purchase contract: price, deposit, contingencies, financing terms and the closing date you want.
2. Counteroffer.The seller can accept, decline or counter. You can go back and forth until both sides agree in writing.
3. Acceptance and deposit.Once both sides sign, the deposit goes to escrow as set out in the contract, and the deadlines begin.
4. Inspection.You have a set period to inspect the home, and for a condo, to review the association documents. The contract says what you can do if you are not satisfied.
5. Financing contingency.The contract sets a deadline for your loan approval. Work with a lender early, and keep your finances steady until closing.
6. Appraisal.Your lender orders an appraisal to confirm the home's value for the loan. If it comes in below the price, the contract and your lender decide your options.
7. Disclosures.Hawaii law generally requires sellers of most residential property to give you a written seller disclosure statement. The law gives you 15 calendar days after you receive it to review it and decide whether to cancel, unless you and the seller agree otherwise in writing. Leasehold and condo purchases add the lease or association documents.
8. Escrow.A neutral escrow company holds the funds and paperwork, orders the title search, and prepares the closing documents. Review the closing statement before you sign.
9. Closing.You sign, the funds are delivered, the deed is recorded, and you receive the keys. A final walk-through shortly before closing is common.

Sources: HRS §508D-4 and §508D-5 (seller disclosures). The rest of this section is general information.

Next step: Ready to talk through your timeline? Tell us where you are in the process. Request a call.

Official links

• Honolulu Real Property Assessment: home exemption
• Honolulu Real Property Assessment: FAQ
• Honolulu Real Property Assessment: Residential A
• Honolulu Treasury Division (property tax bills and payments)
• City Council Resolution 26-62 (fiscal year 2026-27 tax rates)
• Hawaii Real Estate Branch: resources for condominium owners and buyers
• Hawaii Insurance Division
• FloodSmart (National Flood Insurance Program)
• FEMA: flood risk for real estate, lending and insurance
• USGS: lava-flow hazard zones, Island of Hawaii

Marcus Suzuki (R) is a real estate broker. This guide is general information about buying on Oahu and is not legal, tax or insurance advice. Last reviewed: [date to be set at launch].