Empty Homes Tax

Many of Hawaii’s residents cannot find an affordable place to live. Since property taxes for the counties are low, homes that sit vacant—usually owned by out-of-state people—should be taxed at a higher rate so that they contribute more to local communities.

In 2023, the average rent for Hawaii was just under $2,000 a month. As a result, more than 3 in 5 renters are cost-burdened, which means they spend over 30% of their income on rent.

Despite this issue of affordability, there are many rentable homes that are vacant for most of the year. In Honolulu alone, over 35,000 units remain vacant. Some of these properties are vacation rentals, and others are second homes. Either way, the owners of these units do not have to pay any additional tax.

This not only makes real estate more expensive, but it also limits the availability of long-term rentals.

Hawaii Appleseed has advocated for an extra tax on empty homes at the county level for Honolulu. Since Hawaii does not have a state property tax, it would be complicated to tax empty homes at the state level. With this in mind, there has recently been a proposal to create a General Excise Tax surcharge on empty homes.