Hawaii 2025 Regular Session

Hawaii Senate Bill SB206 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1	THE SENATE S.B. NO. 206 THIRTY-THIRD LEGISLATURE, 2025 STATE OF HAWAII A BILL FOR AN ACT RELATING TO PROPERTY. BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
2	2
3	3	THE SENATE S.B. NO. 206
4	4	THIRTY-THIRD LEGISLATURE, 2025
5	5	STATE OF HAWAII
6	6
7	7	THE SENATE
8	8
9	9	S.B. NO.
10	10
11	11	206
12	12
13	13	THIRTY-THIRD LEGISLATURE, 2025
14	14
15	15
16	16
17	17	STATE OF HAWAII
18	18
19	19
20	20
21	21
22	22
23	23
24	24
25	25
26	26
27	27
28	28
29	29
30	30
31	31	A BILL FOR AN ACT
32	32
33	33
34	34
35	35
36	36
37	37	RELATING TO PROPERTY.
38	38
39	39
40	40
41	41
42	42
43	43	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
44	44
45	45
46	46
47	47	SECTION 1. The legislature finds that the high cost of purchasing property has put homeownership out of reach for many families in Hawaii. One factor contributing to the inflated costs of homes is the activity of nonresident alien developers and investors. Speculation in the land market by these developers and investors artificially increases competition in the market and drives prices beyond the resources of individuals and families that would like to purchase homes. The legislature also finds that other jurisdictions have restricted nonresident aliens from purchasing land in an attempt to keep prices from being artificially inflated. For example, New Zealand has placed prohibitions to prevent nonresident aliens from buying into most parts of its residential property market. Oklahoma, Wisconsin, and other states in the United States have adopted similar restrictions. The purpose of this Act is to prohibit nonresident aliens and businesses and trusts significantly controlled by nonresident aliens from acquiring certain residential property in the State, except as otherwise provided by law. SECTION 2. The Hawaii Revised Statutes is amended by adding a new chapter to title 28 be appropriately designated and to read as follows: "Chapter NONRESIDENT ALIEN ACQUISITION OF RESIDENTIAL PROPERTY § -1 Definitions. As used in this chapter, unless the context requires otherwise: "Nonresident alien" means any: (1) Individual who is a foreign national, not a citizen of the United States, and not a legal resident of the United States; (2) Business formed under the laws of a country or a political subdivision of a country other than the United States; (3) Business having more than per cent of its stock, securities, or other ownership held or owned by persons described in paragraph (1) or (2); or (4) Trust having more than twenty per cent of the value of its assets held for the benefit of persons described in paragraph (1) or (2). "Residential property" means real property that is zoned as residential property in the county where the property is located. "Threshold property" means residential property containing a main structure that was constructed more than five years prior to the acquisition or purchase date; provided that if the residential property is a unit of a condominium, the unit shall be considered to have been constructed on the completion deadline date submitted pursuant to section 514B-83(a)(2). § -2 General prohibition. (a) Except as otherwise provided in this chapter, a nonresident alien shall not acquire, own, or hold any interest, directly or indirectly, in any threshold property. (b) Notwithstanding any law to the contrary, an authorization by the State to conduct business within the State shall not be construed to exempt a nonresident alien from the prohibition established in this section. § -3 Exceptions. (a) The prohibition in section ‑2 shall not apply to: (1) The extent that it is contrary to any treaty in which the United States is a party; provided that the treaty is in force; (2) Any residential property acquired before July 1, 2025; provided that the property remains in the possession of the owner who acquired the property before July 1, 2025; or (3) Any residential property that was not a threshold property when initially acquired by a nonresident alien but subsequently qualified as a threshold property; provided that the property remained in the possession of the owner who acquired the property before it qualified as a threshold property. (b) The prohibition in section -2 shall not prevent a nonresident alien from: (1) Acquiring residential property or any interest in residential property by devise, inheritance, or in the good faith collection of debts by due process of law; (2) Acquiring liens on residential property or any interest therein; (3) Lending money and securing it by a lien or mortgage on residential property or any interest therein; (4) Enforcing the foregoing liens or mortgages; or (5) Acquiring and holding title to residential property, or any interest therein, upon which a lien is fixed or upon which a loan of money was made and secured; provided that any threshold property so acquired shall be conveyed to a person who is not a nonresident alien within five years after title is perfected. Any threshold property not conveyed by the foregoing deadline or conveyed to a nonresident alien in violation of this chapter shall revert and escheat to the State pursuant to section -5. § -4 Conveyance of threshold property before proceedings by the State initiated. (a) Any nonresident alien who holds threshold property in violation of this chapter may convey title thereto at any time before the institution of proceedings by the State to revert and escheat the property. (b) Notwithstanding subsection (a), any conveyance made for the purpose and with the intention of evading this chapter shall be void, and any property so conveyed shall revert and escheat to the State pursuant to section -5. § -5 Proceedings by the State; compensation. (a) The attorney general, when having reason to believe that threshold property in this State is held contrary to this chapter, shall file an action on behalf of the State in the circuit court where the property is situated, to revert and escheat the property to the State. (b) No later than ninety days before filing an action under this section, the attorney general shall serve a written notice of claim, by registered mail or personal service, to: (1) The owner of the property; (2) The person who last claimed to own the property for real property taxation purposes; or (3) A duly authorized agent. (c) If notice cannot be accomplished by one or more of the methods in subsection (b), notice may be made by publication in a newspaper of general circulation in the county where the property is situated. (d) If the threshold property subject to these proceedings was acquired by a person pursuant to section -3(b), the State shall pay the full value of the property to the person, less any expense incurred by the State in attaining an appraisal of the property." SECTION 3. This Act does not affect rights and duties that matured, penalties that were incurred, and proceedings that were begun before its effective date. SECTION 4. This Act shall take effect on July 1, 2025. INTRODUCED BY: _____________________________
48	48
49	49	SECTION 1. The legislature finds that the high cost of purchasing property has put homeownership out of reach for many families in Hawaii. One factor contributing to the inflated costs of homes is the activity of nonresident alien developers and investors. Speculation in the land market by these developers and investors artificially increases competition in the market and drives prices beyond the resources of individuals and families that would like to purchase homes.
50	50
51	51	The legislature also finds that other jurisdictions have restricted nonresident aliens from purchasing land in an attempt to keep prices from being artificially inflated. For example, New Zealand has placed prohibitions to prevent nonresident aliens from buying into most parts of its residential property market. Oklahoma, Wisconsin, and other states in the United States have adopted similar restrictions.
52	52
53	53	The purpose of this Act is to prohibit nonresident aliens and businesses and trusts significantly controlled by nonresident aliens from acquiring certain residential property in the State, except as otherwise provided by law.
54	54
55	55	SECTION 2. The Hawaii Revised Statutes is amended by adding a new chapter to title 28 be appropriately designated and to read as follows:
56	56
57	57	"Chapter
58	58
59	59	NONRESIDENT ALIEN ACQUISITION OF RESIDENTIAL PROPERTY
60	60
61	61	§ -1 Definitions. As used in this chapter, unless the context requires otherwise:
62	62
63	63	"Nonresident alien" means any:
64	64
65	65	(1) Individual who is a foreign national, not a citizen of the United States, and not a legal resident of the United States;
66	66
67	67	(2) Business formed under the laws of a country or a political subdivision of a country other than the United States;
68	68
69	69	(3) Business having more than per cent of its stock, securities, or other ownership held or owned by persons described in paragraph (1) or (2); or
70	70
71	71	(4) Trust having more than twenty per cent of the value of its assets held for the benefit of persons described in paragraph (1) or (2).
72	72
73	73	"Residential property" means real property that is zoned as residential property in the county where the property is located.
74	74
75	75	"Threshold property" means residential property containing a main structure that was constructed more than five years prior to the acquisition or purchase date; provided that if the residential property is a unit of a condominium, the unit shall be considered to have been constructed on the completion deadline date submitted pursuant to section 514B-83(a)(2).
76	76
77	77	§ -2 General prohibition. (a) Except as otherwise provided in this chapter, a nonresident alien shall not acquire, own, or hold any interest, directly or indirectly, in any threshold property.
78	78
79	79	(b) Notwithstanding any law to the contrary, an authorization by the State to conduct business within the State shall not be construed to exempt a nonresident alien from the prohibition established in this section.
80	80
81	81	§ -3 Exceptions. (a) The prohibition in section ‑2 shall not apply to:
82	82
83	83	(1) The extent that it is contrary to any treaty in which the United States is a party; provided that the treaty is in force;
84	84
85	85	(2) Any residential property acquired before July 1, 2025; provided that the property remains in the possession of the owner who acquired the property before July 1, 2025; or
86	86
87	87	(3) Any residential property that was not a threshold property when initially acquired by a nonresident alien but subsequently qualified as a threshold property; provided that the property remained in the possession of the owner who acquired the property before it qualified as a threshold property.
88	88
89	89	(b) The prohibition in section -2 shall not prevent a nonresident alien from:
90	90
91	91	(1) Acquiring residential property or any interest in residential property by devise, inheritance, or in the good faith collection of debts by due process of law;
92	92
93	93	(2) Acquiring liens on residential property or any interest therein;
94	94
95	95	(3) Lending money and securing it by a lien or mortgage on residential property or any interest therein;
96	96
97	97	(4) Enforcing the foregoing liens or mortgages; or
98	98
99	99	(5) Acquiring and holding title to residential property, or any interest therein, upon which a lien is fixed or upon which a loan of money was made and secured;
100	100
101	101	provided that any threshold property so acquired shall be conveyed to a person who is not a nonresident alien within five years after title is perfected. Any threshold property not conveyed by the foregoing deadline or conveyed to a nonresident alien in violation of this chapter shall revert and escheat to the State pursuant to section -5.
102	102
103	103	§ -4 Conveyance of threshold property before proceedings by the State initiated. (a) Any nonresident alien who holds threshold property in violation of this chapter may convey title thereto at any time before the institution of proceedings by the State to revert and escheat the property.
104	104
105	105	(b) Notwithstanding subsection (a), any conveyance made for the purpose and with the intention of evading this chapter shall be void, and any property so conveyed shall revert and escheat to the State pursuant to section -5.
106	106
107	107	§ -5 Proceedings by the State; compensation. (a) The attorney general, when having reason to believe that threshold property in this State is held contrary to this chapter, shall file an action on behalf of the State in the circuit court where the property is situated, to revert and escheat the property to the State.
108	108
109	109	(b) No later than ninety days before filing an action under this section, the attorney general shall serve a written notice of claim, by registered mail or personal service, to:
110	110
111	111	(1) The owner of the property;
112	112
113	113	(2) The person who last claimed to own the property for real property taxation purposes; or
114	114
115	115	(3) A duly authorized agent.
116	116
117	117	(c) If notice cannot be accomplished by one or more of the methods in subsection (b), notice may be made by publication in a newspaper of general circulation in the county where the property is situated.
118	118
119	119	(d) If the threshold property subject to these proceedings was acquired by a person pursuant to section -3(b), the State shall pay the full value of the property to the person, less any expense incurred by the State in attaining an appraisal of the property."
120	120
121	121	SECTION 3. This Act does not affect rights and duties that matured, penalties that were incurred, and proceedings that were begun before its effective date.
122	122
123	123	SECTION 4. This Act shall take effect on July 1, 2025.
124	124
125	125
126	126
127	127	INTRODUCED BY: _____________________________
128	128
129	129	INTRODUCED BY:
130	130
131	131	_____________________________
132	132
133	133
134	134
135	135
136	136
137	137	Report Title: Residential Property; Nonresident Aliens; Prohibitions Description: Prohibits nonresident aliens and businesses and trusts that are significantly controlled by nonresident aliens from acquiring certain residential property in the State, except as otherwise provided by law. The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.
138	138
139	139
140	140
141	141
142	142
143	143
144	144
145	145	Report Title:
146	146
147	147	Residential Property; Nonresident Aliens; Prohibitions
148	148
149	149
150	150
151	151	Description:
152	152
153	153	Prohibits nonresident aliens and businesses and trusts that are significantly controlled by nonresident aliens from acquiring certain residential property in the State, except as otherwise provided by law.
154	154
155	155
156	156
157	157
158	158
159	159
160	160
161	161	The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.