Honolulu lawmakers have advanced a controversial measure to establish an “empty homes” tax on Oʻahu.
The Honolulu City Councilʻs Bill 46 would create a property tax on homes not occupied by long-term residents for at least six months out of the year.
The empty home would be taxed at 1% of its tax-assessed value in the first applicable year, 2% for the second year, and 3% every year afterward.
It’s one effort by the council to free up affordable housing for local families on Oʻahu.
The City Council passed the measure 6-3 in a full hearing on Wednesday, with the understanding that lawmakers will continue to discuss the potential issues of the bill.
Refining the measure could help reduce unintended consequences of an empty home tax.
Oʻahu resident and business owner Roland Kuroda said he and his wife bought a second home that friends and family can use but is meant for their kids and grandchildren to eventually use as long-term housing.
“ If I understand the bill as written, with our annual property tax plus the empty home tax proposed, we will have to pay $100,000 per year to keep the home in the use that I have right now. … I had to do (the math) over and over again because I couldn't believe it,” Kuroda told the council.
He said his family would be forced to rent or sell that house if the bill passes, and he said locals will still have to compete with out-of-state renters or buyers.
Councilmember Andria Tupola’s concerns include forcing some local homeowners to pay significantly higher taxes without providing proportionate services in return.
“I personally do not want to pass or be a part of any bills (in which) the tax burden does not actually provide a benefit to our constituents. We want it to provide a benefit and I think, right now, we're not totally sure yet if it will,” she said.
Proponents of the empty homes tax believe it can help local families live in Hawaiʻi.