If enacted, HB 1213 will amend Section 247-2 of the Hawaii Revised Statutes, directly affecting the financial landscape for real estate transactions within the state. By increasing the conveyance tax dramatically for specific buyers, the legislation may deter speculative investments in residential properties and ensure that only those who are contributing to the state's economy can engage in purchasing properties. The new rate structure could have wider implications for the housing market, potentially driving prices down as demand from out-of-state buyers decreases.
Summary
House Bill 1213 proposes significant amendments to Hawaii's conveyance tax structure by imposing a tax rate of 300% on sales of residential real property for which the purchaser has not filed a state income tax return in the past four years. The bill aims to encourage compliance with state tax laws while discouraging real estate transactions by out-of-state or non-compliant buyers, thereby potentially increasing local tax revenues. Advocates of the bill assert that it targets individuals who do not contribute to the state's tax base while profiting from its real estate market.
Contention
Opposition to HB 1213 is expected to arise from multiple fronts, particularly from real estate investors and developers who argue that the drastic tax increase could stifle property sales and negatively impact the local economy. Critics contend that the bill unfairly penalizes individuals who may not be aware of their tax obligations or who have valid reasons for their tax status. This raises questions about fairness and accessibility in the housing market, especially for first-time homebuyers or those looking to invest in property for personal use rather than for rental or commercial purposes.
Relating to an annual study by the Texas A&M University Texas Real Estate Research Center of the purchase and sale of single-family homes by certain institutional buyers.
In tenement buildings and multiple dwelling premises, further providing for definitions and providing for borrowing requirements, for abandonment of residential rental property and for maintenance by receiver; and imposing penalties.