Hawaii’s population has been suffering a net decline for each of the past six years, with the state’s high cost of living and lack of employment opportunities being among the most cited reasons. Looking at the even broader picture, tax increases in general are not a good idea for Hawaii’s economy, especially not now when it already has one of the highest tax burdens in the nation. Now, the category encompasses many Oahu homes, with political pressure building to increase the threshold or abolish the tax category completely. That might seem to be a stretch, but few people thought that Hawaii’s median price would soon reach even $1 million when Honolulu County established a tiered Residential A property tax classification for tax year 2018, with properties valued above $1 million facing a higher tax rate. It seems to us that Hawaii is in no position to be risking such impacts, regardless of whatever the motive of this bill might be.įurthermore, with land-use, zoning and other regulations continuing to throttle Hawaii homebuilding - leaving Hawaii with a massive housing shortage and no prospect of a building boom any time in the near future - there is no guarantee that $2 million won’t someday soon be the median home price in in some areas of the state, which would rebound on a large portion of Hawaii homeowners far sooner than we might expect. A report by the Sage Policy Group on transfer taxes notes that such laws can “lead to decreases in population, real incomes, real estate transactions, investment in structures, and quality of the built environment.” Our main concern about this bill is that higher conveyance taxes might harm Hawaii’s economy. It also removes the cap on what portion of conveyance tax revenues may go toward funding the rental housing revolving fund. This bill exempts from the conveyance tax properties financed in some way by the Hawaii Housing Finance and Development Corp., provided that such properties are to be used exclusively for affordable housing. The Grassroot Institute of Hawaii would like to offer its comments on SB362 SD1, which would double the conveyance tax rate on single-family homes and condos valued at $2 million or more. RE: SB362 SD1 - RELATING TO THE CONVEYANCE TAX To: Senate Committee on Health and Human Services 22, 2023, by the Grassroot Institute of Hawaii to the Senate Committee on Health and Human Services.Ĭonference Room 211 and via videoconference The following testimony was presented Feb.
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