Hawaii is known for its stunning landscapes and tropical lifestyle, but living in paradise comes at a high price. The cost of living in Hawaii is among the highest in the U.S., driven by expensive housing, groceries, and utilities. Understanding these expenses is crucial for anyone considering a move or already residing in the islands.
With its high housing prices, expensive utilities, and elevated grocery costs, Hawaii ranks among the most expensive states to live in. As a result, the definition of "low income" differs significantly from most other states. The U.S. Department of Housing and Urban Development (HUD) defines low income based on the area median income (AMI) for different household sizes.
For 2024, HUD categorized a family of four earning $93,000 or less as low income in Honolulu County, while very low income was set at $58,100. These numbers fluctuate slightly for other counties, such as Maui, Kauai, and the Big Island.
The Federal Poverty Level (FPL) is another benchmark, though it is significantly lower than Hawaii cost of living. For a single person in 2024, the FPL was $15,060, but in Hawaii, the income needed to cover basic expenses is much higher. When residents face unexpected shortfalls, emergency financial assistance such as local short-term loans can provide a temporary solution to cover immediate costs until the next paycheck.
Hawaii’s real estate market remains one of the most expensive in the U.S., driven by limited land availability, high demand, and construction costs. As of early 2025, the median home price in Hawaii is approximately $800,000, though this varies significantly by island.
Home prices have fluctuated due to factors such as mortgage rates, inflation, and a limited housing supply.
Housing in Hawaii is a mix of single-family homes, condos, and apartments. Due to high costs, multi-generational living is common, with families sharing homes to offset expenses. Additionally, affordable housing programs exist, but demand often exceeds availability.
Property taxes in Hawaii are among the lowest in the country, with an average rate of 0.28%, but the high home prices mean actual tax bills can still be significant.
Renting is a more affordable alternative to buying, though prices remain steep. Many renters in urban areas like Honolulu struggle to find reasonably priced accommodations, as high demand continues to push up prices. This makes long-term renting a major component of the overall cost of living in Hawaii, especially for those who cannot afford to purchase a home. As of early 2025:
Many landlords require first and last month’s rent plus a security deposit upfront, making the initial move-in cost high. Renters may also face limited availability due to a strong demand for housing, particularly in urban areas like Honolulu. To cover unexpected moving expenses, residents may find themselves in a tough situation - that’s why getting payday loans in Honolulu can be a great option to turn to.
Hawaii's remote location means utility and service costs are higher than the national average, driven by the need to import fuel and goods. Residents pay some of the highest electricity rates in the U.S., and everyday services can be more expensive compared to mainland states.
As of early 2025, the average price of regular gasoline in Hawaii is around $4.75 per gallon, though it can fluctuate depending on the island:
Hawaii consistently ranks among the states with the highest gas prices due to shipping costs and state fuel taxes. Public transportation options like TheBus (on Oahu) and limited rideshare services can help reduce transportation expenses.
Other major utility costs in Hawaii include:
Overall, utilities in Hawaii can add up quickly, making energy-efficient appliances and solar power popular choices for cost savings.
Hawaii’s grocery prices are among the highest in the U.S., primarily due to the state’s reliance on imported goods. Since nearly 90% of Hawaii’s food is shipped in, transportation costs significantly raise prices, adding another challenge to the cost of living in Hawaii. However, locally grown produce and goods can be more affordable, especially at farmers' markets.
As of early 2025, the average price of a gallon of milk in Hawaii is around $6.50 – $7.50, depending on the island and store location. Prices tend to be highest in rural areas and smaller stores.
Other common grocery items and their estimated prices:
Locals often shop at Costco, Sam’s Club, and farmers' markets to save money, and many grow their own fruits and vegetables to offset costs.
Hawaii has a progressive state income tax system, meaning tax rates increase as income rises. The state has 12 tax brackets, ranging from 1.4% to 11%, with the highest rate applying to individuals earning over $200,000 or joint filers making over $400,000.
For 2025, here are some key Hawaii state income tax brackets for single filers:
(Source: Hawaii Department of Taxation, 2025 Income Tax Rates)
Hawaii's highest 11% rate is one of the highest in the nation, but residents benefit from lower property taxes compared to other states.
Instead of a traditional sales tax, Hawaii has a General Excise Tax (GET), which applies to business transactions at every stage of production. The base GET rate is 4% statewide, but counties add surcharges:
(Source: State of Hawaii Department of Taxation General Excise Tax)
Since GET is applied to businesses (which often pass the cost to consumers), the effective tax rate on purchases can be closer to 4.7% – 5% in practice.
Hawaii’s state income tax is among the highest in the U.S. but has progressive deductions for lower-income residents. Unlike some states, Hawaii does not tax Social Security benefits, making it attractive for retirees. However, pensions and other retirement income may be subject to state taxes.
(Source: Hawaii State Tax Guide)
Hawaii has one of the lowest property tax rates in the U.S., averaging 0.28% of assessed home value. This is significantly lower than the national average of 0.99%. However, because home prices are high, actual property tax bills can still be substantial.
Non-residents and investors often face higher property tax rates, particularly for second homes or short-term rental properties.
Living in Hawaii involves several costs beyond housing, utilities, and taxes. These costs can vary depending on lifestyle and location, but some categories, like transportation and insurance, are generally higher than the mainland U.S.
Transportation expenses, including car rentals, vehicle maintenance, and public transit, are a key part of the cost of living in Hawaii, especially for those who commute regularly or rely on personal vehicles for daily travel. Due to Hawaii’s isolated location and reliance on imports, transportation costs are elevated. As mentioned, the average price of gasoline is about $4.75 per gallon, and prices can vary depending on the island.
Besides fuel, other costs associated with transportation in Hawaii include:
Hawaii residents also face relatively high insurance premiums due to its location and the cost of claims.
When discussing education in Hawaii, the cost depends on whether you're sending children to public or private institutions.
Hawaii is known for its natural beauty and outdoor activities, but some forms of entertainment can also be costly.
Hawaii also hosts a variety of cultural events, but prices for attending can range from $20 to $100 depending on the performance or festival.
Living in Hawaii is widely recognized as being expensive, and it is consistently ranked as one of the highest-cost states in the U.S. The factors driving up the cost of living are tied to Hawaii’s geographical isolation, high demand for housing, and limited natural resources.
The state's economy is dependent on imports for most goods, which raises the price of everyday items. Additionally, the influx of tourists and new residents seeking to live in paradise increases demand for both housing and services, pushing prices even higher.
While the cost of living in Hawaii is much higher than in most mainland states, it’s useful to compare specific aspects of living costs to understand how it measures up. Here are some comparisons to the mainland for key areas:
When it comes to overall cost of living, Hawaii consistently ranks in the top 3 most expensive states, with some areas of the state, like Honolulu, being far more expensive than even high-cost cities on the mainland, such as San Francisco or New York City.
National Cost of Living Index (as of 2025):
These comparisons help illustrate just how expensive Hawaii can be in comparison to most mainland states, and why many people moving there should be prepared for a significant jump in costs. However, Hawaii also offers a unique lifestyle and amenities that justify the higher costs for many.
The cost of living in Hawaii can be expensive due to factors like its isolation, high demand for housing, and limited resources. While costs for housing, groceries, and transportation tend to be higher than the mainland, the state's natural beauty and unique lifestyle make it a desirable destination for many. Is it expensive to live in Hawaii? Absolutely — but for those who budget wisely and plan ahead, the rewards of island life can outweigh the financial challenges. If you're considering a move or already reside in Hawaii, it's essential to account for these higher costs to maintain financial stability. Despite the expenses, Hawaii's charm, cultural richness, and quality of life continue to attract new residents who are willing to embrace its unique way of living.
