The Honolulu City Council is nearing a final vote on an empty homes tax bill that has been in discussion for six years. This latest version includes 17 exemptions, sparking concerns that these exemptions could dilute the efficacy of the tax. Supporters argue that taxing vacant units will incentivize owners to sell or rent them out in the midst of the city’s housing crisis.
The proposed tax would start at 1% of assessed value in fiscal year 2027, eventually climbing to 3%. At least 20% of the revenue generated would be dedicated to affordable housing initiatives. However, concerns have been raised about exemptions for local residents, second home owners, military personnel, short-term rental owners, among others.
The bill aims to target offshore investors and fill empty homes, excluding those owned by local residents. Council members argue that it’s important to distinguish between properties owned by outside investors and those owned by local families. However, critics believe that the multiple exemptions added to the bill weaken its impact and wish for a stronger version that covers more homes.
The debate over exemptions and the potential impact of the empty homes tax on the housing market continues, with a yearlong study underway to evaluate its effectiveness. Despite differences in opinions among residents, council members are pushing to pass the bill and are open to making amendments as needed in the future.
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