To address housing shortage, Oahu lawmakers consider ‘empty homes tax’ for vacant properties

HONOLULU (HawaiiNewsNow) – A bill aimed at freeing up unused housing space on Oahu is getting closer to becoming law.
According to the 2020 U.S. Census, roughly 35,000 housing units on Oahu are considered unoccupied. The proposed empty homes tax would be in addition to annual property taxes.
Bill 46 would add a 3% tax for every vacant dwelling unit on a residential property.
It would also require residents to declare their properties’ status annually, which could involve city inspections.
Oahu homeowner Jeffrey Laurent told the city council he spends only four months a year on the island, and an added tax would be unfair.
“Our family has owned a home in Kaneohe for 11 plus years. However, we were forced to move to New Jersey to tend to the failing health of a parent,” explained Laurent.
Laurent claims the bill would raise the annual taxes on his property from $17,000 to $81,000.
City Council Chair Tommy Waters and Councilmember Radiant Cordero are sponsoring the bill, which they say is meant to encourage people to rent out or free up their unused units.
“We’re trying to get creative to figure out how we can get our local people to stay here. We can’t build our way out of this solution,” said Waters.
The bill includes exceptions for medical leave, but some feel the tax should only apply to out-of-state homeowners.
“Our dream was to purchase a second home in Mokuleia to use and to leave a legacy property for our children and grandchildren for future enjoyment,” said one Oahu resident.
“We will now have to pay $100,000 per year to keep the home.”
Supporters said the bill inceAll ntivizes people with second homes to make better use of them.
“My mom also owns a second home, but she rents it out to someone who uses it, a working person, a doctor, these are the kind of opportunities we need to create,” said a resident who testified at the city council.
Bill 46 also appears to have backing from other city council members.
“In my mind, the purpose definitely isn’t to generate revenue because if the bill works, there will be zero revenue generated from it because housing would be used for housing,” said Councilmember Matt Weyer.
The bill would not apply to legal short-term rentals.
It’s passed its second reading and will be headed to a committee next month.
Copyright 2024 Hawaii News Now. All rights reserved.