Empty Homes Tax FAQs

FAQ for the Empty Homes Tax (EHT)

Why do we need another tax?

What we need are GOOD taxes, such as the EHT, that prioritize housing Oahu’s residents. We instead have BAD tax policies that incentivize investors to buy our homes and leave them empty.

Why is the EHT tax so high (3%)?

The tax needs to be high enough to motivate owners to convert their empty homes into homes for Oahu’s residents. Low taxes won’t change behavior or help fund affordable housing. The tax rate will be phased in during 3 years (1st year 1%, 2nd year 2%, 3+ years 3%) so that owners will have time to consider conversion option.

Does an EHT infringe on owners’ rights to use their property as they wish?

No. Owners can still use their property as they wish. This tax incentivizes but doesn’t require conversion of properties into homes. If owners choose to maintain empty homes, their EHT taxes will help address our housing crisis caused in part by so many empty homes.

How many Empty Homes are on Oahu?

In 2020, the US Census found 34,253 vacant homes on Oahu. The City is hiring a consultant to confirm the number and location of empty homes on Oahu.

What is an Empty Home?

An empty home is one that is NOT the “principal residence” of a homeowner, renter or other permitted occupant for at least 6 months of the tax year, and that does not meet any of the EHT’s other exemptions (such as properties subject to court proceedings, active sale efforts, transfer of title, and pending building permit for substantial renovations; and properties where the owner has died or been deployed).

What is a principal residence?

It’s the usual place a person lives and conducts his/her daily affairs, and is generally the residential address used for income tax returns, driver’s license, car registration, paying bills, etc. A person may only have one principal residence.

Will I owe any EHT tax if I own, rent or occupy my home and live in it at least 6 months of the year?

No. The EHT does not apply to homes that are the principal residence of an Oahu resident for at least 6 months of the year. This is true even if you may travel, be hospitalized, or be elsewhere for a major part of the year.

How will EHT tax revenues be spent?

EHT revenues “may be used to increase the city’s supply of affordable homes and address homelessness.” We are seeking dedication of these revenues to assure they are spent for this purpose. Up to 5% of EHT revenues may be used to pay for EHT implementation and enforcement, including additional staff.

How will the City determine which homes are “empty” to pay the EHT?

All property owners will file an annual declaration regarding whether their property was used as a principal residence by an Oahu resident during the prior tax year, or whether it was subject to any other EHT exemption. The City will have auditors do regular audits and enforcement, to assure homes meet a valid exemption or have paid their EHT tax.

How will this tax be implemented?

The City is hiring a consultant to help design implementation and enforcement.

What are the enforcement penalties?

The bill provides penalties of $250 - $10,000 for violations (plus payment of EHT taxes owed).

What’s the status of the EHT in Honolulu City Council?

The Empty Homes Tax proposed in Bill 46 (2024), is currently pending in City Council. It will be required to go through three City Council hearings and certain Council committee hearings. The City has contracted with a consultant to assist on design, implementation and enforcement of the EHT. Bill 46 is the new version of the earlier EHT Bill 9 (2022), which expired.

What’s new and improved about Bill 46 versus the earlier Bill 9 for an Empty Homes Tax?

A public education program to assure property owners will know about the law and how to comply
Phase-in of tax rates: 1% tax in Year 1, 2% tax in Year 2, 3% tax in Years 3+
A grace period and right to request extension of time for filing property declarations
Penalties to match existing short-term-rental rules (up to $10,000 per violation)

What can I do to help support the EHT?

Contact your council member and ask them to support the EHT/Bill 46

Write a letter to the editor supporting the EHT

Ask your friends, family & networks to support EHT

When Bill 46 is set for a hearing, submit testimony in support of the EHT

How do I learn who my city council member is?

Go to https://www.honolulucitycouncil.org/find-my-councilmember

How do I submit testimony to support the EHT?

Go to BILL046(24). If there is an upcoming hearing for which testimony is being accepted, click on the “Submit Testimony” button, then the Blue “Select” button and select Bill 046(24). Then provide the information requested and select whether you are testifying for yourself or an organization, and whether you want to submit written testimony only, or written and oral testimony (oral testimony is usually limited to just a couple of minutes). Then type or attach your testimony and click Submit.

What has been the experience of other cities using Empty Homes Taxes?

Bill 46 is modeled on Vancouver’s EHT, which in 6 years has generated over $140 million revenues for affordable housing; reduced empty homes by 54%; and helped lower rental rates. Several California cities (San Francisco, Oakland, Berkeley) have recently passed EHTs and are starting implementation.

How does Oahu’s EHT Bill 46, differ from Maui’s Long Term Rental ordinance?

Maui has a LongTerm Rental ordinance that reduces property taxes for property owners who lease their property for at least 12 months. The idea is a step in the right direction, but the tax reduction may not be sufficient to motivate new longterm rentals. And the ordinance does not create new tax revenues to address affordable housing or homelessness.

Note: This FAQ is a summary based on the current terms of Bill 46 (2024), and is subject to further details in Bill 46 and to any amendments that may occur before Bill 46’s passage. For other questions or comments, please contact us at info@hihousing.org.