🏠 Hawai'i Property Tax Benefits for Veterans
This is one of the most underused benefits in Hawai'i. Many disabled veterans who fully qualify have never filed for this exemption and are paying thousands of dollars in property taxes they don't owe. Each of Hawai'i's four counties administers its own program.
- Home is fully exempt from property taxes — subject only to the minimum tax (~$300/year on O'ahu)
- Applies to primary residence and the land it sits on
- Unremarried surviving spouse also qualifies and retains the exemption
- Once approved — no annual refiling required as long as eligibility continues
- Honolulu is expanding eligibility to veterans with 80%+ disability rating
- Requires proof of honorable discharge and VA certification of disability rating
- File Form BFS-RP-E-10.5 with your county's Real Property Assessment Division
realproperty.honolulu.gov · File by Sept. 30 · Form BFS-RP-E-10.5
mauicounty.gov/rpa · Contact Real Property Assessment Division
hawaiipropertytax.com · Contact Real Property Tax Division
kauai.gov · Contact Real Property Assessment Division
⚖️ SCRA — Servicemembers Civil Relief Act
If you are on active duty, the SCRA (Servicemembers Civil Relief Act) is one of the most powerful legal shields available to you as a homeowner. Most servicemembers don't know these protections exist or never think to invoke them — often until it's too late.
🛡️ Foreclosure Protection
If your mortgage predates your active duty service, your lender cannot foreclose without a court order — even in Hawai'i, which normally allows non-judicial foreclosure. This protection lasts throughout active duty and for 12 months after separation.
- Applies even if you never told your lender you were in the military
- Any foreclosure sale without court order is legally invalid
- Court must appoint an attorney to represent you if you can't appear
- Judge can pause or adjust the loan if service affected your ability to pay
📉 6% Interest Rate Cap
For debts — including your mortgage — taken out before active duty service, your lender must reduce your interest rate to 6% during service and for one year after.
- Applies to mortgage, car loans, credit cards, and other pre-service debts
- Lender must forgive — not defer — interest above 6%
- Submit written request with copy of military orders to invoke
- Cannot use invoking SCRA rights against your credit score
✈️ PCS & Lease Protections
- Can terminate a housing lease with 30 days notice if receiving PCS orders or deployment orders of 90+ days
- Can terminate a vehicle lease penalty-free with PCS orders or active duty orders of 180+ days
- Protection from default judgments in court while deployed and unable to appear
- Creditors cannot repossess property without a court order
🏦 VA Loan — Unique Resources & Options
If your home loan is VA-guaranteed, the VA has a direct financial interest in preventing foreclosure — and resources available to you that conventional loan holders don't have.
- VA can intervene with your servicer on your behalf
- Free VA financial counselors — call 877-827-3702
- VA can request servicer delay foreclosure while options are explored
- Note: VASP ended May 2025 and was replaced by the VA Partial Claim Program — see section below
- Similar to a short sale but specific to VA loans
- VA may allow sale for less than owed without lender deficiency
- Preserves more VA entitlement than full foreclosure
- Must apply through your VA loan servicer directly
- Interest Rate Reduction Refinance Loan — streamlined VA refinance
- Can significantly lower monthly mortgage payment
- Minimal paperwork — no new appraisal or income verification required
- Must already have a VA-guaranteed loan to qualify
🆕 VA Partial Claim Program
If your VA-guaranteed loan is behind because life threw something at you, this is the newest and most powerful tool the VA has created in twenty years. Created by the VA Home Loan Program Reform Act signed July 30, 2025, the Partial Claim Program lets the VA advance funds to bring your loan current — parked as a no-interest, no-monthly-payment lien you only repay when you sell, refinance, or pay off the home. Original loan terms stay exactly as they were.
The most important thing to know: This program is loan-based, not status-based. Active duty, veteran, surviving spouse, former spouse, Reservist, or National Guard — your military status doesn't determine eligibility. What matters is whether your loan is VA-guaranteed and whether the home is your primary residence.
📋 What If You Are… — Quick Eligibility Lookup
| Your situation | Eligible? | Important note |
|---|---|---|
| Active duty, VA loan, primary residence | ✅ Yes | Standard criteria apply |
| Veteran, VA loan, primary residence | ✅ Yes | Standard criteria apply |
| Reservist or Guard, VA loan, primary residence | ✅ Yes | Same rules — service status doesn't change eligibility |
| Surviving spouse, on the original loan note | ✅ Yes | No assumption needed |
| Surviving spouse, NOT on the note (SII only) | ⚠️ Conditional | Must have assumed loan BEFORE default |
| Former spouse via divorce, on the note | ✅ Yes | No assumption needed |
| Former spouse via divorce, NOT on the note | ⚠️ Conditional | Must have assumed loan BEFORE default |
| Deployed servicemember, intend to return | ✅ Yes | Family member occupancy also satisfies the rule |
| In long-term care or hospitalized, intend to return | ✅ Yes | Family member occupancy also satisfies the rule |
| VA loan on rental or investment property | ❌ No | Primary residence required — strict |
| VA loan on second home or vacation home | ❌ No | Must be your majority-of-year residence |
| Already used a Partial Claim or COVID-era equivalent | ❌ No | One-time per loan (disaster exception only) |
| Currently in active bankruptcy | ❌ No | Must complete or dismiss first |
✅ Do You Qualify? — The Full Checklist
- VA-guaranteed loan in first lien position
- Primary residence (where you reside the majority of the calendar year)
- At least 12 monthly payments made since loan origination (6 since any modification)
- At least 3 full months past due when the Partial Claim is reported to the VA
- Reinstatement amount ≤ 25% of unpaid principal balance (30% if COVID-era arrears included)
- Not in active bankruptcy (dismissed Chapter 7, dismissed/discharged Chapter 13, and discharged Chapter 7 with reaffirmation are OK)
- No pending foreclosures from other lien holders (HOA, IRS, mechanic's lien, etc.)
- All borrowers on the note must sign the Partial Claim Attestation Document
- No prior VA Partial Claim, COVID-19 Veterans Assistance Partial Claim Payment, or COVID-19 Refund Modification on this loan
- Must complete a 3-month Trial Payment Plan before the claim funds
💰 How the Money Works
| Term | Details |
|---|---|
| Maximum advance | Up to 25% of unpaid principal balance (30% if COVID-era arrears included) |
| Interest rate | 0% — no interest ever accrues |
| Monthly payment | None required (voluntary payments allowed without penalty) |
| When repaid | When you sell, refinance, pay off the loan, or transfer title |
| Fee to obtain | None — servicer cannot charge any fee |
| One per loan? | Yes — lifetime limit, except for presidentially declared disasters |
| Program window | 5 years — through July 30, 2030 |
⚠️ Three Ways Veterans Permanently Lock Themselves Out
Below are the three most common ways a veteran or active duty homeowner can permanently disqualify themselves from this program — usually without realizing it. Each one is preventable.
If you get PCS orders and rent out your VA-loan home, you may have just disqualified yourself from a future Partial Claim. The home stops being your primary residence the moment it becomes a rental. But eligibility is preserved if a family member occupies it as their primary residence, or if you can document that you intend to return after deployment. Before converting your home to a rental, call the VA Regional Loan Center at 877-827-3702 (option 5) and ask about your options. A 10-minute conversation today can preserve a tool you may need three years from now.
If you used a VA loss mitigation tool during the pandemic — including the COVID-19 Veterans Assistance Partial Claim Payment, a COVID-19 Refund Modification, or an earlier VA Partial Claim — you may have already used your one-time benefit. Many veterans took advantage of these tools between 2020 and 2022 and don't realize a NEW Partial Claim today isn't an option. Before counting on this program, call the VA Regional Loan Center at 877-827-3702 (option 5) and ask: "Has this loan ever received VA loss mitigation assistance?" Get the answer in writing. Knowing the door is closed lets you focus on the right tool — usually a loan modification — instead of wasting weeks on an application that will be denied.
If you inherited a VA-loan home from a deceased spouse, or received it through a divorce, federal law (Garn-St Germain) lets you keep making the payments without formally assuming the loan. You become a Successor in Interest — a protected status that lets you communicate with the servicer and stay in the home. Many surviving and former spouses live in this status for years, paying the mortgage on time, never realizing they haven't actually assumed the loan. Under the Partial Claim rules, being a Successor in Interest is NOT enough. You must have completed a formal loan assumption BEFORE the default begins. If you're currently paying a VA mortgage as a Successor in Interest and the loan is current, pursue a formal loan assumption now, while everything is going fine. That preserves your eligibility for the Partial Claim — and for VA's other loss mitigation tools — if you ever need them. Call the loan servicer and ask about the assumption process.
📑 Trade-Offs to Know Before You Sign
The Partial Claim is voluntary VA assistance, not an entitlement, and it comes with consequences that deserve consideration before signing the attestation:
- Becomes a federal debt if not eventually repaid — collectable like any government debt, including through garnishment of federal benefits and tax refunds
- May prevent future IRRRL refinance or certain other loss mitigation options
- One-time per loan (with narrow disaster exception)
- Required Trial Payment Plan — three on-time monthly payments before the claim funds. Miss one, the offer is withdrawn.
- Personal liability — all borrowers on the note must sign and become personally responsible
None of this makes the Partial Claim a bad deal. For a veteran whose hardship has passed and who can resume the regular payment, it's a remarkable tool. But signing means accepting a federal debt that doesn't go away on its own.
📋 How to Apply — Your Action Plan
- Call the VA Regional Loan Center BEFORE your servicer: 877-827-3702 (option 5). VA technicians don't work for your lender — they advocate for you. Ask: "Is my loan eligible for a Partial Claim?"
- Ask the technician: "Has this loan ever received VA loss mitigation assistance?" This is the question that determines whether the Partial Claim is on the table or not. Don't move forward until you know.
- Contact your servicer and specifically request the Partial Claim Program. Servicers are required to follow the VA Loss Mitigation Waterfall, and the Partial Claim is a step on that waterfall. If the first person you talk to doesn't know about it, escalate — ask for the VA loss mitigation specialist.
- Be prepared for the Trial Payment Plan. The servicer will send you a written TPP within 15 calendar days of reporting the case to VA. You'll make three monthly payments on time. Then — and only then — the VA advances the funds to bring your loan current.
- Sign the Partial Claim Attestation Document carefully. Read every line. This is where you accept personal liability for the federal debt and acknowledge the limits on future loss mitigation. All borrowers on the original note must sign.
- If your servicer says "no" or stalls — escalate to the VA Regional Loan Center. Implementation is still rolling out. Servicers are uneven. The VA Regional Loan Center can intervene on your behalf.
📞 Where to Get Help
Free VA loan technicians — your advocate, not your servicer's.
Free advocacy and benefits assistance across all islands.
Confirmed services only: Advance Health Care Directive, Power of Attorney, and Simple Wills. Does not handle foreclosure, housing, or veterans benefits matters.
Free counseling and lender negotiation support.
🪖 PCS Orders & What to Do with Your Hawai'i Home
Receiving PCS (Permanent Change of Station) orders out of Hawai'i is one of the most financially stressful events in military life. You have more options than most servicemembers realize — and some important tax considerations.
Cleanest exit, eliminates carrying costs and long-distance landlord stress.
Hawai'i's strong rental market can generate income while property appreciates. Requires a property manager.
A buyer can assume your VA loan — attractive if your rate is below current market.
If PCS is related to a BRAC (Base Realignment and Closure), you may qualify for financial assistance on a home sale loss.
HARPTA & Capital Gains — Critical Tax Info
- Active duty servicemembers can suspend the 5-year ownership/residency rule for capital gains exclusion for up to 10 years with PCS orders more than 50 miles away
- Total look-back period extends to 15 years — giving you far more flexibility than civilians
- HARPTA withholding waiver may be available — explore this before closing
- This suspension cannot be used on more than one property at a time
💰 Additional Hawai'i Financial & Homeowner Benefits
Military retirement pay is fully exempt from Hawai'i state income taxes. SBP, RCSBP, and RSFPP annuities are also not taxed in Hawai'i. VA disability compensation is also tax-free.
Specially adapted vehicles provided to 100% disabled veterans by the VA are exempt from all Hawai'i vehicle taxes. A $46 annual state registration fee exemption also applies for qualifying disabled veterans.
Active duty servicemembers and their dependents stationed in Hawai'i qualify for in-state tuition at all UH system schools — regardless of home state. Also applies to VA education benefit users.
Veterans receive 5–10 point hiring preference in federal civil service positions — significant in Hawai'i given the large federal and military employer presence on the islands.
Hawai'i National Guard members may receive up to 100% tuition reimbursement at public community colleges and 50% at public universities through the State Tuition Assistance Program (STAP).
Qualified veterans and their dependents may be buried in Hawai'i State Veterans' Cemeteries on O'ahu, Hawai'i, Kaua'i, Maui, Moloka'i, and Lāna'i.
🤍 Surviving Spouse & Dependent Children — Your Rights & Benefits
When a veteran or servicemember passes away, their surviving spouse and dependent children do not lose the benefits their loved one earned. In many cases those benefits transfer — and in some cases expand. Many surviving families never apply for benefits they are fully entitled to simply because no one told them those benefits exist.
🏠 Property Tax Exemption — Surviving Spouse
Under Hawai'i law (HRS §246-29), if the veteran dies, the property remains exempt from property taxes if the surviving spouse continues to own and occupy it and does not remarry. The exemption transfers automatically — but the surviving spouse must notify the county and file to maintain it.
- Veteran's death certificate
- Marriage certificate
- VA disability rating letter or certification
- Proof of continued occupancy as primary residence
- Statement that surviving spouse has not remarried
💵 VA Dependency & Indemnity Compensation (DIC)
If you're the surviving spouse, child, or parent of a servicemember who died in the line of duty, or the survivor of a veteran who died from a service-related injury or illness, you may be eligible for tax-free monthly DIC payments.
- Base monthly rate: $1,699.36 (effective December 1, 2025)
- Add $360.85 if veteran was rated totally disabled for 8+ continuous years before death
- Add $421.00 per dependent child under age 18
- Surviving spouses who remarry at age 55+ may continue to receive DIC
- Child 18–23 enrolled in qualifying school: $356.66/month
- Helpless child over 18: $717.50/month
- Children must be unmarried to qualify
- All DIC payments are completely tax-free including Hawai'i state taxes
🛡️ Survivor Benefit Plan (SBP)
- If the veteran enrolled in SBP, surviving spouse receives up to 55% of the veteran's retired pay monthly
- SBP payments are not taxed in Hawai'i — SBP, RCSBP, and RSFPP annuities are all exempt
- As of January 1, 2023, the SBP-DIC offset was fully eliminated — survivors can now receive full benefits from both SBP and DIC simultaneously
- Contact DFAS (Defense Finance and Accounting Service) at 800-321-1080 to verify SBP enrollment status
🌺 Additional Hawai'i Survivor Benefits
Surviving spouses and dependent children of veterans who died from service-connected causes may qualify for VA education benefits. Apply at va.gov.
Surviving spouses and children who don't qualify for TRICARE may be eligible for CHAMPVA — comprehensive VA health care. Call 800-733-8387.
Ten points are added to the examination score of surviving spouses applying for federal civil service positions — significant in Hawai'i.
Unmarried surviving spouses of veterans who died from service-connected causes may retain VA home loan eligibility — no down payment required. Confirm with the VA at 877-827-3702.
📋 Survivor Action Plan
- 1File VA Form 21-0966 (Intent to File) immediately — before anything else. This protects your benefit start date and locks in potential retroactive back pay. File online at va.gov or call 800-827-1000. Don't wait until you have all your documents.
- 2Contact the Hawai'i Office of Veterans' Services (OVS). Free guidance for surviving families — they can walk you through every benefit and help you file correctly. dod.hawaii.gov/ovs
- 3Notify your county Real Property Assessment Division about the property tax exemption transfer. Bring the veteran's death certificate, marriage certificate, and VA disability rating letter.
- 4Check SBP enrollment status. Contact DFAS at 800-321-1080. If your spouse enrolled in SBP, you are entitled to up to 55% of their retired pay monthly — and since 2023 this is no longer reduced by DIC payments.
- 5Apply for VA DIC benefits using Form 21P-534EZ. If your spouse died from a service-connected cause or was rated totally disabled for 10+ years, you and your dependent children likely qualify for monthly tax-free payments.
- 6Check CHAMPVA eligibility for health coverage. If you don't have TRICARE, call 800-733-8387 to check eligibility for comprehensive VA health care coverage.
- !Do not make any major decisions about the home immediately. Give yourself time. Understanding all your financial benefits first will help you make a better decision about the home later. Any legitimate offer will still be there in 30 days.
- 7Reach out to Barbara when you're ready. When the time comes to think about the property — whether that's in two weeks or two years — I'm here to help. As a fellow veteran, I want to make sure your family is protected. No pressure, no obligation, ever.
- Veteran's death certificate
- Marriage certificate
- VA disability rating letter
- DD-214 (discharge papers)
- SBP election documents
- Children's birth certificates
- Property deed and tax bill
- VA Form 21-0966 (Intent to File)
📋 Your Action Plan
- 1Check your property tax exemption status today. If you have a 100% service-connected disability rating and haven't filed for the exemption in your county — do it immediately. You may be paying thousands in taxes you don't owe.
- 2If you're active duty and behind on payments — invoke SCRA in writing. Send a written request with your military orders to your loan servicer. Your interest rate must drop to 6% and no foreclosure can proceed without a court order.
- 3Call the VA loan technician line: 877-827-3702. If you have a VA-guaranteed loan and are in financial difficulty, VA counselors can intervene with your servicer on your behalf — for free.
- 4Contact your JAG office first. Volunteer Legal Services Hawai'i (808-528-7046) also helps qualifying veterans with housing and civil legal matters. Legal Aid Society of Hawai'i (808-536-4302) — Elder Law Services only (seniors 60+): Advance Health Care Directive, Power of Attorney, and Simple Wills. They do not handle housing or foreclosure matters.
- 5If you have PCS orders — understand your HARPTA suspension rights. Active duty members can suspend the capital gains look-back period for up to 10 years with qualifying PCS orders. Know this before you sell.
- 6Contact Hawai'i Office of Veterans' Services (OVS). Free advocacy and benefits assistance across all islands. dod.hawaii.gov/ovs
- !Don't make any homeownership decision without first confirming which veteran benefits apply to your situation. Many veterans leave significant money on the table simply because they didn't know to ask.
📖 Glossary of Military & VA Terms
Basic Allowance for Housing — monthly tax-free housing stipend paid to active duty servicemembers based on rank and duty location. Hawai'i rates are among the highest in the nation.
Base Realignment and Closure — federal process for reorganizing U.S. military installations. Servicemembers relocated due to BRAC may qualify for the DoD Homeowners Assistance Program (HAP).
Civilian Health & Medical Program of VA — VA health care for surviving spouses and dependents of 100% disabled or deceased veterans who do not qualify for TRICARE. Call 800-733-8387.
Defense Finance & Accounting Service — federal agency that handles military pay and Survivor Benefit Plan payments. Call 800-321-1080 to verify SBP enrollment.
Dependency & Indemnity Compensation — tax-free monthly VA payment to surviving spouses, children, and parents of servicemembers who died in the line of duty or from service-connected causes. 2026 base rate: $1,699.36/month.
DoD Homeowners Assistance Program — federal program providing financial aid to military homeowners who lose money on a home sale due to a BRAC-related PCS move.
Hawai'i Real Property Tax Act — state tax withholding law requiring buyers to withhold a percentage of the sales price when a seller is not a Hawai'i resident. Active duty servicemembers with PCS orders may qualify for a waiver.
Interest Rate Reduction Refinance Loan — streamlined VA refinance allowing veterans with existing VA-guaranteed mortgages to lower their interest rate with minimal paperwork. No new appraisal required.
Judge Advocate General — the military's legal corps. JAG offices provide free legal assistance to active duty servicemembers and eligible veterans on matters including SCRA rights, foreclosure, and real estate.
Office of Veterans' Services — Hawai'i state agency providing free advocacy, benefits assistance, and claims support for veterans, families, and survivors across all islands. dod.hawaii.gov/ovs
Promise to Address Comprehensive Toxics Act — 2022 federal law expanding VA health care and benefits eligibility for veterans exposed to burn pits, Agent Orange, and other toxic substances, including expanded DIC eligibility.
Permanent Change of Station — official military orders directing a servicemember to relocate to a new duty station. PCS orders trigger important rights including SCRA lease termination and HARPTA capital gains suspension.
VA Partial Claim Program — created by the VA Home Loan Program Reform Act signed July 30, 2025. For VA-guaranteed loans on a primary residence, the VA advances funds to bring a delinquent loan current; the advance is recorded as a no-interest, no-monthly-payment second lien repaid only when the home is sold, refinanced, or paid off. Available to active duty, veterans, surviving spouses, and former spouses who meet eligibility criteria. 5-year statutory window through July 30, 2030. See section above for full details.
Survivor Benefit Plan — DoD program providing up to 55% of a servicemember's retired pay to an eligible surviving spouse or dependent. As of 2023, SBP and DIC can both be received simultaneously with no offset.
Servicemembers Civil Relief Act — federal law protecting active duty servicemembers from foreclosure without a court order, capping pre-service debt interest at 6%, and allowing lease termination with qualifying orders.
Military health insurance program for active duty servicemembers, retirees, and their dependents. Surviving spouses who lose TRICARE eligibility may qualify for CHAMPVA.
U.S. Dept. of Veterans Affairs — federal department providing benefits, health care, and services to U.S. military veterans and their families. Oversees VA home loans, disability compensation, DIC, and more.
Veterans Affairs Servicing Purchase — VA program that previously assisted veterans in financial difficulty by purchasing and modifying their VA-guaranteed loans. VASP ended in May 2025 and was replaced by the VA Partial Claim Program.
📞 Free Veteran & Military Resources in Hawai'i
Free Military & Veteran Resources
About free legal help in Hawai'i: Truly free legal representation for housing matters is very limited. Most free resources provide legal information or referrals — not an attorney who will represent you. The Hawai'i State Bar Lawyer Referral Service (808-537-9140) is the most reliable path to a licensed attorney; many offer a free first consultation. Be clear on what each resource offers before counting on it.
Legal Navigator Hawai'i — Start Here
Free online self-help platform built by Legal Aid Society of Hawai'i. Use it to understand your legal situation, get a guided action plan, access court forms, and find the right organizations for your specific problem. Provides legal information, not legal advice or representation.
legalnavigatorhawaii.orgVA Regional Loan Center
Free VA loan assistance, loss mitigation, and Partial Claim Program support. Call option 5 for loan technicians.
877-827-3702 (option 5)Hawai'i Office of Veterans' Services (OVS)
Free advocacy, benefits assistance, and claims support. Can help you apply for property tax exemptions and access state benefits.
dod.hawaii.gov/ovsJAG Legal Assistance Office
Free legal help for active duty and eligible veterans — SCRA rights, foreclosure defense, and real estate matters.
militaryonesource.milLegal Aid Society of Hawai'i
Elder Law Services — for seniors age 60+ only. Legal Aid's Elder Law Services program offers free advance planning documents for qualifying residents age 60 and over: Advance Health Care Directive (AHCD), Power of Attorney for Financial Decisions, and Simple Wills. This program does not cover housing, foreclosure, benefits, or other legal matters. For housing and foreclosure legal help, use Volunteer Legal Services Hawai'i or the Hawai'i State Bar Lawyer Referral Service (see below).
808-536-4302 (O'ahu) · 1-800-499-4302 (Neighbor Islands) · legalaidhawaii.orgHawai'i State Bar — Lawyer Referral Service
Get matched with a licensed Hawai'i attorney in your area of need. Many attorneys offer a free or reduced-fee first consultation. Available Monday–Friday 8:30 a.m.–4:30 p.m.
808-537-9140 · hawaiilawyerreferral.com💰 Grants & Financial Assistance Programs
View 25+ military, state, and nonprofit programs to help with mortgage payments, rent, and emergency needs.
Browse All Programs →Veteran to Veteran — Let's Talk Through Your Situation
Every benefit and protection in this guide is yours — use them with or without me. If you'd like to talk through your specific situation, I'm available. Your service earned you these benefits. Let's make sure you're using them.
Talk to a Fellow Veteran →"Informed Decisions are the Best Decisions."™
"Informed Decisions are the Best Decisions."™
Barbara Coote is a licensed Hawai'i REALTOR® and investor. This content is free homeowner education — not legal or financial advice. Consult a JAG attorney, VA counselor, or licensed Hawai'i CPA before making decisions about your home or benefits.