Property Management Insights
Oahu lawmakers are attempting to pass Bill 46, a vacant homes tax proposal. With a housing shortage impacting local families, the goal of this tax is to increase the inventory of available homes to rent. If signed into law, it would go into effect in July 2026. Here’s a breakdown of what this proposal entails, why it’s significant, and how it might affect homeowners and the local housing market.
What is the Vacant Homes Tax Proposal?
The proposed tax targets homes that remain unoccupied for more than six months of the year. The idea is simple: discourage property owners from leaving homes empty by imposing a financial penalty. Similar policies have been enacted in other cities to incentivize property utilization and free up more housing for residents. There is a significant housing shortage on Oahu and the permitting process works too slowly to build enough properties to meet demand.
Potential Impacts on Homeowners
The proposal presumes that all properties are empty. This means that homeowners will need to prove residency and/or that the property is being rented. The government would require yearly filing of the necessary documentation. The penalty for the tax would be 1% of the assessed value for the first year, 2% the second year, 3% on the third year and so on. A $1,000,000 home would result in a $30,000 tax for the first year.
If you own a vacation home or investment property in Hawaii, this tax could add to your expenses unless the home is occupied or rented out for a minimum period. Homeowners are encouraged to review their property use and prepare for potential changes if the tax passes. Watch Doug’s explainer video in a recent Ask Doug! here.
Concierge Management Services
Avoid this potential tax and ensure your investment properties are rented fort he required amount of time. Our Concierge Property Management Department provides rental management services designed to remove the stress from your life, making the management process as seamless and rewarding as possible. We offer comprehensive services from tenant screening to round-the-clock support, and we have been obtaining record-breaking rental prices.
With high demand for rental housing on Oahu, you have the opportunity to secure long-term tenants and generate consistent revenue while avoiding costly vacancy penalties. Our team is here to guide you every step of the way, making the process seamless and efficient.
To learn more about our full-service concierge management department, click here or contact Doug at (808) 596-4883 or dougdavis@caronb.com. Visit our YouTube channel to watch our property management series, Ask Doug! in which Doug answers common property management questions.
