Increase the Tax on Luxury Homes
Modernize the tax on property sales and dedicate its revenue to the Department of Hawaiian Home Lands.
Those who profit most from our islands should also invest the most in their future.
estimated total conveyance tax revenue in FY2027 in a House committee’s estimate
estimated by FY2031
a year for Hawaiian Home Lands, at most
Where the conveyance tax stands
The conveyance tax is paid when real estate changes hands. Its rates were last changed in 2009, and property values in Hawaiʻi have risen considerably since then. Today its revenue goes to the general fund, the Land Conservation Fund and the Rental Housing Revolving Fund. It does not currently include funding for the Department of Hawaiian Home Lands (DHHL).
DHHL’s waitlist for a homestead had 29,589 applicants as of November 2025.
Where the money goes today
The law splits conveyance tax collections three ways. The Rental Housing Revolving Fund gets 50 percent, up to $38 million a year. The Land Conservation Fund gets 10 percent, up to $5.1 million a year. The general fund gets the rest. Hawaiian Home Lands is not currently part of the split.
Because both funds are capped, once collections pass about $76 million a year, every added dollar goes to the general fund.
Where the money goes today
How Hawaiʻi law splits conveyance tax collections. The two special funds are capped, so the general fund gets everything above the caps.
| Fund | Share of collections | Most it can get each year |
|---|---|---|
| Rental Housing Revolving Fund | 50% | $38 million |
| Land Conservation Fund | 10% | $5.1 million |
| General fund | The rest | No cap |
| Hawaiian Home Lands | Not included | $0 |
Source: HRS 247-7 (current law). Each special fund gets its share or its cap, whichever is less.
Rates and allocation: Hawaiʻi Revised Statutes sections 247-2 and 247-7.
Why the tax should be marginal
Today the conveyance tax has price tiers, and the rate for a sale’s tier applies to the entire price. When a sale crosses into the next tier, the higher rate applies to every dollar, not just the dollars above the line. That creates cliffs: an owner-occupied home that sells for $4,000,000 owes $8,005 more in tax than one that sells for $3,999,000. It also gives sellers a reason to price a home just under each line.
A marginal tax works like income tax brackets: each rate applies only to the slice of the price inside its band, so the tax rises smoothly as the price does.
That is what lets the tax ask much more of the most expensive sales while charging typical buyers less. Under the Legislature’s April 2026 draft, buyers who live in the home would owe less than today on every sale up to about $2.25 million, and other residential buyers on every sale up to about $2.07 million.
What a $1,000 difference in price costs
Conveyance tax on an owner-occupied home that sells for $3,999,000 and for $4,000,000. Today, a higher price tier raises the rate on the entire price. Under the Legislature’s April 2026 draft, each rate applies only to the slice of the price in its band.
| Sale price | Todayone rate on the entire price | Proposeda rate on each slice |
|---|---|---|
| $3,999,000 | $19,995 | $66,260 |
| $4,000,000 | $28,000 | $66,300 |
| Extra tax for the extra $1,000 | $8,005 | $40 |
Today’s amounts follow HRS 247-2. Proposed amounts follow the SB 3028 SD2 HD2 rate schedule (April 2026) and are illustrations, not revenue estimates. Source: Hawaiʻi Appleseed conveyance model (Census-Forecaster).
Draft: SB 3028 SD2 HD2 (April 8, 2026), which died in conference.
What we are asking for
- Switch to marginal rates, so each rate applies only to the part of the price in its band and there are no cliffs.
- Ask more of high-value and investment property sales, while protecting local families buying a home to live in.
- Dedicate the new revenue to DHHL, so the trust can build homes and infrastructure for its beneficiaries.
What it could raise
A House committee estimated what the conveyance tax would bring in if SB 3028 used the rates of HB 2049 HD3: $271 million in total in FY2027, rising to $303 million by FY2031. That is all conveyance tax revenue, not just the increase. It would fill every special fund to its cap, including $60 million a year for DHHL, and send the rest to the general fund.
SB 3028 SD2 HD2, the last draft before the bill died in conference, would send 30 percent of collections, up to $60 million a year, to Hawaiian Home Lands, along with dedicated funding for rental housing, urban development, and land conservation.
Where the new revenue could go
Estimated total conveyance tax revenue in a House committee’s table for SB 3028, in millions of dollars. Under current law, Hawaiian Home Lands does not receive a share.
- Hawaiian Home Lands, up to $60M a year
- Rental housing, urban development, land conservation, general fund and other uses
Source: House committee report, SB 3028 SD2 HD1 estimated revenue allocation (2026). The bill itself left its rates blank, so the estimate assumes the rates of HB 2049 HD3. The $60M is the table’s figure for DHHL and matches the cap in SB 3028 SD2 HD2; the remainder is total minus $60M.
What one sale would owe
Conveyance tax on a single sale at each price, today and under the Legislature’s April 2026 draft (SB 3028 SD2 HD2), for a buyer who lives in the home and for one who does not. The draft breaks even at about $2.2 million for owner-occupants and $2.1 million for everyone else.
| Sale price | Lives in the hometoday → proposed | Does not live in the hometoday → proposed |
|---|---|---|
| $800,000 | $1,600 → $1,200 | $2,000 → $1,600 |
| $1.5 million | $4,500 → $4,050 | $6,000 → $5,550 |
| $2 million | $10,000 → $6,300 | $12,000 → $8,800 |
| $3 million | $15,000 → $26,300 | $18,000 → $58,800 |
| $5 million | $35,000 → $106,300 | $42,500 → $198,800 |
| $10 million | $100,000 → $346,300 | $125,000 → $588,800 |
Amounts follow the SD2 HD2 rate schedule and today’s law (HRS 247-2) and are illustrations, not revenue estimates. The revenue estimate above assumes HB 2049 HD3’s steeper rates. Source: Hawaiʻi Appleseed conveyance model (Census-Forecaster).
Most buyers would pay less or the same
Share of Maui County sales that would owe less, the same, or more under the draft. Maui is the one county that publishes every recorded sale with its price and tax paid. In the model, 88 percent of the statewide increase would come from buyers who do not live in the home.
- Pay less, 43%
- Pay the same, 42%
- Pay more, 15%
Source: Hawaiʻi Appleseed conveyance model (Census-Forecaster), Maui recorded sales, first year.
Estimate: House committee report, SB 3028 SD2 HD1 with the rates of HB 2049 HD3 (2026), FY2027–FY2031; applies to residential property.
Help us fund Hawaiian homes
Sign up and we’ll tell you when this bill is moving and when to submit testimony.
Our other 2027 priorities: Tax Profits Like Paychecks and Preserve Working Families’ Tax Credits. See all three.