Rethinking Hawaiʻi’s conveyance tax

Hawaiʻi grapples with a daunting challenge: the urgent need for 4,000 to 5,000 affordable rental units annually over the next five years to tackle our lack of affordable housing. This acute shortage of housing drives both the houselessness and outmigration crises. The state Legislature has a pivotal opportunity to address this situation by reevaluating conveyance tax rates on the sale of multimillion dollar investment properties.

The conveyance tax, a one-time levy on property sales, is currently underutilized in its potential to fund critical initiatives such as affordable housing, land conservation and infrastructure development. Compared to similar high-value property markets in cities like Seattle, San Francisco and Los Angeles, Hawaiʻi’s conveyance tax rates are disproportionately low. This low tax rate incentivizes wealthy investors to capitalize on the market, which drives up home prices for locals.