Buyers who live on the West Coast today and are considering making Hawaiʻi Island their primary home, or splitting the year between the two.
Both states tax income. California's top marginal rate is 13.3% (including its mental health services tax on income over $1 million). Hawaiʻi's top marginal rate is 11%, and Hawaiʻi applies a lower maximum rate of 7.25% to qualifying long-term capital gains. Washington taxes certain long-term capital gains, and in 2026 enacted a 9.9% tax on income over $1 million beginning in 2028, which is expected to face legal challenges. Which rules apply to you depends on your income, its source, and when you become a Hawaiʻi resident.
Not tax advice. Marco In Kona does not provide tax, legal, lending, or investment advice. Review this with your own CPA, attorney, or advisor before acting.
It can. California's Franchise Tax Board treats equity compensation earned while you worked in California as California-source income, even if the options are exercised or the RSUs vest after you move. The allocation is usually based on work days in and out of the state during the vesting period. Plan this with a CPA before you move, especially if a large vest or liquidity event is coming. See also the guide for Buyers after a liquidity event.
Hawaiʻi looks at domicile, meaning where your permanent home is, and generally presumes residency for people present in the state more than 200 days in a tax year. Moving your driver's license, voter registration, vehicles, and primary home all support a change of domicile, and leaving ties behind in your old state can undercut it. California audits high-income former residents, so documentation matters. Your CPA and attorney should guide this.
If the home is your primary residence and you file for the county home exemption, Hawaiʻi County's FY 2026–27 rate is $5.75 per $1,000 of assessed value, which compares favorably with many West Coast counties. A second home is taxed at higher, tiered rates.
| Hawaiʻi County class (FY 2026–27) | Rate per $1,000 of assessed value |
|---|---|
| Homeowner (your primary residence, with the home exemption) | $5.75 |
| Residential, not owner-occupied: first $2 million | $11.10 |
| Residential, not owner-occupied: portion from $2 million to $4 million | $14.50 |
| Residential, not owner-occupied: portion above $4 million (new tier) | $17.00 |
| Long-term rental | $7.75 |
| Hotel and resort | $11.55 |
| Agricultural and native forest | $9.35 |
Rates adopted by the Hawaiʻi County Council for fiscal year 2026–27 (July 1, 2026 to June 30, 2027), as reported by Big Island Now. Taxes are based on the county's assessed value, not the purchase price. Confirm current rates and your classification with the Hawaiʻi County Real Property Tax Office.
For a deeper look, read the Hawaiʻi property tax guide for Kona Buyers.
Investment or business property can generally be exchanged for like-kind investment property in another state, though a home you live in does not qualify. California keeps track of gain deferred on California property exchanged out of state and requires annual reporting, so it may still collect tax when the replacement property is eventually sold. Work with a qualified intermediary and a CPA before you list your California property.
Not tax advice. Marco In Kona does not provide tax, legal, lending, or investment advice. Review this with your own CPA, attorney, or advisor before acting.
Full-time residents often choose Kailua-Kona and Keauhou for convenience to town, Holualoa for land and a cooler climate, or the Kohala Coast resort communities such as Mauna Lani and Kohanaiki for amenities and services. Start with Big Island communities and current properties.
Marco regularly works with Buyers who tour by video first and then fly in for a focused trip. Share your priorities ahead of time and he will line up the properties worth seeing in person. Start the conversation.
It depends on the costs that matter to you. Hawaiʻi's top income tax rate (11%) is lower than California's (13.3%), and Hawaiʻi County taxes a primary residence at a low rate, but groceries, goods, and electricity typically cost more in Hawaiʻi. A CPA can model your situation.
Yes. Hawaiʻi has a graduated state income tax with a top marginal rate of 11%, and a maximum rate of 7.25% on qualifying long-term capital gains. Confirm current rates and your situation with a CPA.
California generally treats equity compensation earned while you worked in California as California-source income, even if it vests after you move, usually allocated by work days during the vesting period. Plan with a CPA before moving.
Hawaiʻi generally presumes residency for people present in the state more than 200 days in a tax year, but residency is based on domicile, your permanent home, and the overall facts. Your CPA or attorney can advise on your case.
Investment property can generally be exchanged for like-kind investment property in another state, but a personal residence does not qualify, and California tracks gain deferred on California property exchanged out of state. Use a qualified intermediary and a CPA.
Last reviewed October 15, 2026 by Marco A. Silva, Coldwell Banker Island Properties (RB-20599). Information is believed reliable but not guaranteed, and laws, tax rates, and flight schedules change. This page is general information, not tax, legal, lending, or investment advice.
Hawaiʻi Island Buyer Guides