Consultants say Honolulu empty‑homes tax could raise tens of millions; key design choices still unresolved

Summary

Ernst & Young told Honolulu’s Budget Committee that a tax on empty homes as written in Bill 46 could be financially feasible, producing net revenue if implementation costs and exemptions are set as assumed. Committee members and residents pressed for clearer exemptions, legal review and public outreach before the council moves ahead.

Honolulu — Consultants for the city told the Council’s Budget Committee that a proposed empty‑homes tax in Bill 46 could generate net revenue for the City and County of Honolulu if the program is implemented as they modeled, but numerous design choices and legal questions remain unresolved.

Mohammed Bhamani, partner at Ernst & Young and the engagement lead, said the firm’s first‑phase feasibility analysis found the tax “appears to be financially feasible in Honolulu across a range of tax‑rate scenarios under Bill 46 as currently written.” He presented estimates for a range of tax rates, compliance scenarios and startup and operating costs, and answered questions from council members and members of the public.

Bhamani and his colleagues walked the committee through how they estimated the tax base (properties with low utility usage), the likely share of empty properties that would be exempt under Bill 46’s 16 exemption categories and the program costs the city would face. The firm modeled a baseline that starts at a 1% tax rate for the first two years and increases to 3% in year three, and a “medium” cost scenario that produced positive net revenue in…

Consultants say Honolulu empty‑homes tax could raise tens of millions; key design choices still unresolved

Summary

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