🌴 What Is the Empty Homes Tax?
The Empty Homes Tax, formally known as the Hawai‘i State Property Vacancy Tax, would apply an annual tax on residential properties left unoccupied for more than six months in a given year. The idea is to discourage speculative ownership and long-term vacancy, especially in high-demand areas where housing supply is critically low.
While this tax is still in the proposal stage, it reflects a growing trend seen in other global cities grappling with housing shortages—such as Vancouver, Melbourne, and San Francisco—all of which have enacted similar policies in recent years.
💡 Key Goals of the Tax
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Increase housing availability for residents by nudging owners to rent or sell unused properties.
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Generate revenue that could be directed toward affordable housing initiatives.
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Encourage responsible property use, especially in resort and high-demand urban zones.
🏘️ Who Would Be Affected?
If passed, the tax would likely apply to:
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Second homes and investment properties left vacant most of the year.
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Condos and single-family residences in both urban and resort-zoned areas.
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Out-of-state and foreign owners who don’t occupy or rent their properties.
However, owner-occupied homes, long-term rentals, and units undergoing major repairs or renovations are expected to be exempt.
📊 Potential Impact on Hawai‘i’s Housing Market
Supporters argue that it could unlock thousands of currently underutilized housing units and send a clear message that Hawai‘i is prioritizing local housing needs.
Critics, on the other hand, warn that the tax could disincentivize investment and place additional burdens on part-time residents who contribute to the economy in other ways.
As of now, the proposed tax rate, enforcement methods, and reporting requirements have not been finalized, but more details are expected as the bill advances through the legislative process.
🧭 What Should Property Owners Do?
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Track occupancy time to determine if you might be subject to the tax.
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Consider renting your property long-term if it's not being used.
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Consult with a tax professional to understand implications and possible exemptions.
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Stay informed as the bill moves through hearings and public commentary.
📝 Final Thoughts
Hawai‘i’s Empty Homes Tax proposal reflects a broader shift toward housing equity and accountability. Whether you’re a homeowner, investor, or property manager, understanding this proposed law and preparing for its potential implications will be essential.
At Team Hawai‘i Real Estate, we’re keeping a close eye on housing policy developments that impact you. Reach out if you’d like to discuss how this proposal—or others—may affect your property plans.
👉 Stay informed—follow our blog or connect with us on Instagram @TeamHawaii.RealEstate for updates!
