Our 2027 Priorities

1. 1

   Increase the Tax on Luxury Homes

   Modernize the tax on property sales and dedicate its revenue to the Department of Hawaiian Home Lands.

   Up to $60M a year

   for Hawaiian Home Lands under last session’s House proposal

   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 does not include funding for the Department of Hawaiian Home Lands (DHHL).

   DHHL’s waitlist for a homestead had 29,589 applicants as of November 2025. We support a conveyance tax that:

   • Asks more of high-value and investment property sales, while protecting local families buying a home to live in.
   • Dedicates the new revenue to DHHL, so the trust can build homes and infrastructure for its beneficiaries.

   A House committee estimated that, with the rates of HB 2049 HD3, the conveyance tax would bring in $271 million in total in FY2027, rising to $303 million by FY2031—all conveyance tax revenue, not just the increase. That would include up to $60 million a year for DHHL, plus dedicated funding for rental housing, urban development, and land conservation. SB 3028 SD2 HD2, the last draft before the bill died in conference, set the same $60 million ceiling for DHHL.

   Those who profit most from our islands should also invest the most in their future.

   Estimate: House committee report, SB 3028 SD2 HD1 with the rates of HB 2049 HD3 (2026), FY2027–FY2031; applies to residential property.

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2. 2

   Keep Working Families’ Tax Credits

   Extend the earned income and food/excise tax credits before they expire.

   $76M

   that working families would lose in 2028 if the credits expire

   In 2023, Act 163 doubled two of Hawaiʻi’s most important credits for working families: the state Earned Income Tax Credit (to 40 percent of the federal credit) and the refundable food/excise tax credit, which helps offset the general excise tax on groceries and other basics.

   Those expansions end after the 2027 tax year. The 2026 Legislature did not extend them. Unless lawmakers act:

   • Working families would lose an estimated $76 million in 2028 alone.
   • The EITC alone reaches about 78,000 Hawaiʻi households a year.

   The child and dependent care tax credit also helps working parents with the cost of childcare.

   Estimates: Hawaiʻi Appleseed tax model, tax year 2028; EITC claims from the Department of Taxation, tax year 2024.

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3. 3

   Tax Profits Like Paychecks

   Tax capital gains at the same rates as ordinary income.

   Over $100M

   estimated new revenue each year

   A nurse or a hotel worker pays Hawaiʻi’s regular income tax rates on every paycheck. But profits from selling stocks, land, and other investments are capped at 7.25 percent—even for the highest-income households, whose wages are now taxed at up to 13 percent.

   Act 24 (2026) raised the top rate on wages but left the capital gains rate alone, so the gap between work and wealth grew from 3.75 to 5.75 percentage points.

   • Taxing capital gains like wages would raise over $100 million a year.
   • About 90 percent of it would come from the top 1 percent of households. Most local families would pay nothing more.

   Estimate: Hawaiʻi Appleseed tax model, tax year 2027, Hawaiʻi residents only, accounting for fewer gains being realized at a higher rate.

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Looking for last session? See our 2026 priorities, including the passage of SB 3125 (Act 24).