Hawaii 2023 Regular Session

Hawaii Senate Bill SB1606

Introduced
1/25/23  

Caption

Relating To Taxation.

Impact

The legislation could significantly impact state laws concerning property taxation and the management of vacant homes. By amending Chapter 247 of the Hawaii Revised Statutes, the bill seeks to increase the financial responsibility of property owners who choose to leave their investments idle. It aims to redirect those properties back into the rental market, thereby bolstering Hawaii's housing supply. Projections based on similar surcharges in other regions indicate potential revenue generation for the state and more dynamic use of available housing units.

Summary

SB1606 addresses the issue of prolonged vacant residential properties in Hawaii, proposing a conveyance tax surcharge as a solution to enhance the local housing supply. The bill identifies vacant homes as a significant contributor to the state's housing challenges, underscoring that Hawaii has some of the lowest property taxes in the nation. By implementing a surcharge, the bill aims to discourage property speculation and generate additional revenue that could be used to address housing shortages. The proposed surcharge would be set at 3% on property transfers involving homes that have been vacant for 180 days or more in a year, further qualifying these homes as 'prolonged vacant properties.'

Contention

However, the bill may face contention from investors and property owners, as it targets the growing trend of investment properties that sit vacant. Critics might argue that the additional tax burden could discourage investment in Hawaii's real estate market or push owners to bypass renting due to the financial disadvantages posed by the surcharge. Nonetheless, supporters of the bill argue it is a necessary step for improving housing availability and affordability for residents, pointing to encouraging examples from jurisdictions like Vancouver, where similar tax initiatives have shown positive effects on reducing vacancy rates.

Companion Bills

HI HB148

Same As Relating To Taxation.

Similar Bills

CA SB1352

Property taxation: newly constructed: reconstructed property.

CA AB245

Property taxation: application of base year value: disaster relief.

CA SB1053

Property taxation: transfer of base year value: disaster relief.

CA SB603

An act to amend Section 69 of the Revenue and Taxation Code, relating to taxation, to take effect immediately, tax levy.

HI HB1398

Relating To Property.

HI HB1398

Relating To Property.

TX HB2011

Relating to the right to repurchase from a condemning entity certain real property for which ad valorem taxes are delinquent.