The legislation mandates the payment of the empty homes tax upon any transfer or conveyance of vacant residential properties in the state. All revenues generated from this tax will be directed to the state treasury, specifically credited to the dwelling unit revolving fund. This financial mechanism is designed to support affordable housing initiatives and promote the development of new housing projects. Furthermore, property owners will be required to maintain thorough records related to the empty homes tax for a minimum of three years, ensuring compliance and facilitating tax assessments.
Summary
SB18 introduces a new tax termed the 'empty homes tax' aimed at addressing the issue of vacant residential properties in Hawaii. Under this bill, any residential property deemed vacant, which is defined as being used for fewer than fifty days in a year, will incur a tax of five percent based on the county real property tax assessed value. The intent is to encourage property owners to either lease or sell unused properties, thereby contributing to solving the housing crisis in the state.
Contention
Several points of contention arise surrounding SB18. Critics express concern regarding its potential impact on property ownership rights and the financial burden it places on landlords with genuinely vacant properties due to market conditions. There are fears that the tax could deter investment in property development and exacerbate rent increases if landlords seek to cover their additional costs. Supporters, however, argue that the bill is essential for addressing the housing shortage and will encourage more efficient use of available residential properties. They contend that it offers a mechanism to mitigate the adverse effects of housing vacancies on the community.