Could charging owners a tax for a vacant home help fix Hawaii’s housing crisis? Lawmakers think it will. And that’s exactly what they are trying to do.
HONOLULU (KHON2) — Could charging owners a tax for a vacant home help fix Hawaii’s housing crisis? Lawmakers think it will. And that’s exactly what they are trying to do.
“To me, we’re in a housing crisis. We can’t build our way out of this,” City Council Chair Tommy Waters said.
So he’s thinking out of the box, pushing for a supplemental vacant house tax on Oahu.
“The idea is to incentivize these owners of these vacant homes to either rent out their home to a local family or sell it to a local family, one or the other,” Waters explained.
That means, in addition to paying Hawaii real property taxes annually, anyone with a home that is vacant six months out of the year, would have to pay taxes on 1% of its assessed value the first year, 2% the next year and 3% after that.
For a home valued at just $1 million the tax would be $30,000.
“Yeah, I mean, it’s a it’s a big hit,” Budget and Fiscal Services Director Andy Kawano said. “If the bill is passed and adopted, my department will be responsible to record. Keep and to actually bill and collect the additional tax.”
Kawano exlained that the potential tax revenue is in the millions, hinging on the number of vacant homes and their value.
“Some cities, in fact, some states collect in excess of one hundred million dollars,” he said.
According to the 2020 US Census, there are over 34,000 vacant homes on Oahu. Determining an updated and accurate count of vacant homes is just one of the things the department of budget and fiscal services will need to do moving forward.
Waters said there is a study in the works to crunch the numbers and help create a plan.
Kawano said compliance is going to be the biggest challenge.
“We can look at documentation. We can look at acquire that homeowners provide copies of their water bill, the electricity bill. But that’s not, it’s not foolproof. And I think at some point in time, we’re also going to have to think about enforcement,” he explained. ” At some point we’re going to have to make sure that we have a program in place to identify the bad actors.”
Matt Weyer, the chair of the city housing, sustainability and health committee, said the city is already laying the groundwork.
“We’re looking at making it as easy as possible to enforce. And then, of course, when we come around to budget next year, ensuring that BFS, Budget and Fiscal Services, has the staffing they need, not just to apply and enforce this law,” Weyer explained.
There are also a number of exemptions including deployed military, recent deaths, and anyone caring for a relative unable to live in their own home, to name a few.
“One of the main things we’re working through is trying to ensure that we don’t harm local families or everyday families with the bill,” he said.
If the bill passes, it would take effect July 2026.
Weyer said the council will have it on their agenda Wednesday, October 9th.