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Advocates press Hawaii lawmakers to modernize conveyance tax to fund housing
Summary
Supporters of HB2049 urged the House Finance Committee to adopt a progressive conveyance-tax structure that would apply higher marginal rates to luxury property sales to raise recurring revenue for affordable housing, DHHL and conservation. Opponents warned of market distortions and urged alternative revenue or spending reforms.
The House Finance Committee packet included sustained testimony on HB2049, a proposal to modernize Hawaii's conveyance tax (the tax charged when property changes hands). Housing advocates and policy groups said a graduated conveyance tax targeted at very high-value transactions — modeled after several large U.S. cities — could produce recurring revenue for affordable housing programs, homelessness services and land conservation.
Nicole Woo of Hawaii Children's Action Network told the committee that progressive conveyance rates would shift the burden away from working families and onto very high-value sales, a point echoed by Hawaii Appleseed and public-health groups. "It actually lowers the amount of conveyance tax on lower property values, making it more affordable for regular working families," Woo said, describing tables in her written testimony showing a rebalanced tax burden.
The Department of Land and Natural Resources and land-conservation stakeholders urged a stable dedication of conveyance revenue for land acquisition and the Land Conservation Fund, noting past year-to-year swings in receipts that had left some programs underfunded.
Opponents including some real-estate groups and free-market organizations warned that a substantial conveyance surcharge could reduce transactions or prompt taxpayer behavior that shifts receipts. The Department of Taxation told the committee it had not modeled behavioral responses extensively and urged caution when estimating long-term yield.
Lawmakers indicated continued interest in options that raise recurring, predictable revenue for housing and conservation but deferred final decisions pending more precise fiscal estimates and discussions around rate design.
