What is the Empty Homes Tax Bill?
What does Bill 46 (2024) really do?
Bill 46 (2024), known as the Empty Homes Tax, has generated a wide community conversation, and a debate over exactly what impacts the measure will have on local families. This Q&A answers some of the common misconceptions of the proposed bill:
Will this bill hurt local families who’ve worked hard to buy a second home that they can hand down to their keiki?
Under the current draft of the bill, local families who have a homeownerʻs exemption on the house or apartment they live in are entitled to one additional property exemption from the Empty Homes Tax. Additionally, any number of properties utilized as a permanent occupied residence, or as rentals for six months or more, are not subject to the Empty Homes Tax.
Is this bill too complicated and costly for the City to implement?
The Ernst and Young report will contain valuable guidance on how to properly administer the tax on a city the size of Honolulu. The Council has provided flexibility within the measure to allow the administration to adopt best practices identified by the study, and to ensure that the application of the tax is not overly burdensome on property owners. Additionally, while the Council has taken a very conservative approach on its projections, if the revenue projections released by the University of Hawai‘i Economic Research Organization, or UHERO, are correct, our costs to fully implement and administer the program would come out to less than half a percent of the projected revenues.
Is this tax even constitutional?
Much has been made about the legal challenges other municipalities have seen as they adopt similar initiatives. This bill has been thoroughly reviewed and amended to ensure that it is in compliance with the City’s Charter, as well as other relevant Federal and State laws. As currently drafted, this measure takes a targeted approach to addressing our affordable housing challenges, while avoiding the specific constitutional challenges experienced by other municipalities.
Where can I learn more about this bill?
Learn more about the status of the Empty Homes Tax Bill by clicking here.
Click here to watch the presentation from Ernst & Young LLP on the first phase of work covering the feasibility of the proposed empty homes tax measure proposed in Bill 46(2024) , CD2, FD1, relating to real property taxation.
View the latest News/Media Coverage here.
