To Address Housing Shortage, Oahu Lawmakers Consider an 'Empty House Tax' on Vacant Properties

HONOLULU (HawaiiNewsNow) – A bill that aims to free up unused housing space on Oahu is getting closer to becoming law.

According to the 2020 U.S. Census, about 35,000 housing units on Oahu are considered unoccupied. The proposed empty home tax would be in addition to annual property taxes.

Bill 46 would add a 3% tax for each vacant dwelling unit on a residential property.

It would also require residents to declare the status of their properties annually, which could involve city inspections.

Oahu homeowner Jeffrey Laurent told the city council that he only spends four months a year on the island and that an additional tax would be unfair.

“Our family has owned a home in Kaneohe for over 11 years. However, we were forced to move to New Jersey to care for the failing health of one of our parents,” explained Laurent.

Laurent claims the project would increase his annual property taxes from $17,000 to $81,000.

City Council President Tommy Waters and Councilman Radiant Cordero are sponsoring the bill, which they say is intended to encourage people to rent out or release their unused units.

“We’re trying to be creative to figure out how we can get local people to stay here. We can’t get out of this solution,” Waters said.

The bill includes exceptions for sick leave, but some think the tax should only apply to out-of-state homeowners.

“Our dream was to buy a second home in Mokuleia to use and leave a legacy for our children and grandchildren for future enjoyment,” said one Oahu resident.

“Now we will have to pay $100,000 a year to maintain the house.”

Supporters said the bill encourages people with second homes to make better use of them.

“My mother also has a second home, but she rents it to whoever uses it, a worker, a doctor, these are the types of opportunities we need to create”, said a resident who gave testimony at the City Council.

Bill 46 also appears to have the support of other councilors.

“In my opinion, the goal is definitely not to generate revenue because if the law works, there would be no revenue generated from it because the housing would be used for housing,” Councilman Matt Weyer said.

The bill would not apply to legal short-term rentals.

It passed second reading and will go to committee next month.