The conveyance tax is a one-time state tax on the sale of real estate, usually borne by the property seller. It should not be confused with property taxes, paid to the county each year. The revenue from this mansion tax partly goes to fund the development of affordable housing, as well as to protect conservation land and natural resources—two places in our social structure where the impact of an out-of-control real estate market has serious, adverse impacts.

Talking Points

1. Commodifying Hawaiʻi’s housing market for profit, instead of using it to meet the needs of local residents, is a driving factor behind the high cost of housing. Our current real estate conveyance tax rates are only 0.50–1.25% on multi-million dollar properties. We should not allow our real estate to be sold at such high prices with such low tax returns.

2. The housing and homelessness crises are dire and bold sustainable action is needed now. According to the 2019 Hawaiʻi Housing Planning Study Study, the State of Hawaiʻi needs approximately 11,857 additional housing units each year to meet the needs of its residents by the year 2025. Some 30% of that need is concentrated at or below people earning 30% of Area Median Income (AMI), or $28,000 per year for a single person.

3. The revenue collected from the conveyance tax earmarked for affordable housing and land conservation is insufficient. Current state law caps the amount of conveyance tax revenue deposited into the Legacy Land Use Conservation Fund and Rental Housing Revolving Fund. We should lift these arbitrary caps.

4. Adding a 10% allocation to the Dwelling Unit Revolving Fund would help support infrastructure investments connected to housing development, crucial for maintaining housing production aligned with our increasing demand.