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+--- Thread: 2nd homes empty property tax rates (/showthread.php?tid=23841)
2nd homes empty property tax rates - leilanidude - 03-02-2026
I have contacted the Mayor's office with a suggestion regarding the disincentives that Hawaii County has towards encouraging people that own 2nd homes that are not occupied by the owner that may help encourage them to rent them out.
1. Landlord/tenant laws favor the tenant (essentially no evictions are done)
2. We tax owners of rental properties as well as 2nd homes that are not rented out, at the same, higher rate. County is in effect, penalizing people for being landlords which is counter to the goal of being able to have more available housing. When you raise property landlords, you end up raising the rent.
3. Propose changing property taxes so that houses that are rented out for 6+ month leases have reduced property tax rates.
4. Take an approach similar to what Spain is now doing,(similar issues with available housing) in which 2nd homes that are not rented out, are taxed at a higher rate, that provides an incentive to rent it out - or incentivizes the owner to sell the home.
If you own a home in Spain that is not your main home and is not being rented out, your annual property tax rate for 2026 will go from 1.1% of the "cadastral value" to 2.0%. As an example, if the property is given an assessed value of EUR 500k your annual property tax would be EUR 5,500. With the house not rented, the tax would be EUR 10,000. That is enough of a jump (EUR 4,500) for property owners to at least consider renting the property out. Spain has a similar issue to Hawaii in that there are many 2nd homes that sit empty most of the year, with some homes only being occupied 2-3 weeks out of any given year.
Spain also taxes vacation rentals at a higher rate, something that Hawaii County is already doing, because housing is tight in most Spanish cities. Non-citizens have bought flats (condos) and they literally sit empty most of the year or are used for tourists.
I do think that Hawaii County is making a mistake at raising property tax on high-value homes for a couple reasons: Those homes utilize very little County services and employ a lot of people to keep them maintained and those homes will not be turned into any sort of "affordable" rental housing. They are not taking away from the rental housing market.
RE: 2nd homes empty property tax rates - ironyak - 03-02-2026
Nah, I think Honolulu's Bill 46 had the right approach with the increasing taxes each year a property sits mostly empty and unused. Renting out the property would avoid this tax increase (as that's your concern right - being able to be a landlord?) but the taxes would still motivate those empty properties to be returned to the market so locals who actually live and work here can afford to own their own place.
If you can afford to sit on unused housing during a critical shortage for actual Hawai'i residents, you can afford to pay extra for that privilege.
RE: 2nd homes empty property tax rates - leilanidude - 03-02-2026
Bill 46 ends up penalizing owners whose house sits empty simply because no one rented it for a number of months. In some markets, it is quite normal for turnover to the next renter takes time. Reducing property taxes for homes that are rented out for long-term (6+ months) ends up also reducing rents - the renter pays the property taxes, although indirectly.
RE: 2nd homes empty property tax rates - Durian Fiend - 03-02-2026
(03-02-2026, 04:52 PM)ironyak Wrote: Nah, I think Honolulu's Bill 46 had the right approach with the increasing taxes each year a property sits mostly empty and unused...
How is it determined that the property is sitting mostly empty? I guess it'd be from the address given by the owner of record.
"...Homes that are the principal residences of the occupants — either the owners or renters — are not affected. Bill 46 does not tax homes where Hawaii residents live.
The bill is similar to one that was passed seven years ago in Vancouver, Canada, that has since reduced the number of vacant homes in that city by more than 50%. (There are an estimated 34,000 vacant homes on Oahu.)..."
RE: 2nd homes empty property tax rates - HiloJulie - 03-02-2026
(03-02-2026, 05:20 PM)Durian Fiend Wrote:(03-02-2026, 04:52 PM)ironyak Wrote: Nah, I think Honolulu's Bill 46 had the right approach with the increasing taxes each year a property sits mostly empty and unused...
How is it determined that the property is sitting mostly empty? I guess it'd be from the address given by the owner of record.
GET Tax remittances.
In order to be a "legal" landlord in Hawaii, the owner who rents any such property must obtain a GET license.
Property would be considered as "un-rented," thus empty, when no GET tax is remitted for any given period.
RE: 2nd homes empty property tax rates - ironyak - 03-03-2026
leilanidude - Bill 46 ends up penalizing owners whose house sits empty simply because no one rented it for a number of months.
Correct - best for the Puna community that housing is actually being used as housing, not as a tax write off, investment vehicle, or poorly run rental.
Reducing property taxes for homes that are rented out for long-term (6+ months) ends up also reducing rents
Or just provides greater profits to the landlord. Maybe securing their profits shouldn't be a goal for the community that actually lives and works here. Could also just go all Bill 9 on the issue as needed.
Hawai'i County Council is also currently considering Bill 128 (on tomorrow's agenda) that would create a new tax tier for "ultra luxury", above $4 Million dollar, homes on Hawaiʻi Island.
The profits can't always keep flowing up to the top - at some point, someone needs to appropriate and redistribute that wealth if everyone wants a semi-functioning and somewhat affordable society.
RE: 2nd homes empty property tax rates - Durian Fiend - 03-03-2026
(03-02-2026, 05:24 PM)HiloJulie Wrote: GET Tax remittances.
In order to be a "legal" landlord in Hawaii, the owner who rents any such property must obtain a GET license.
Property would be considered as "un-rented," thus empty, when no GET tax is remitted for any given period.
So this wouldn't apply to residences owned by wealthy people who simply let the place sit vacant for months on end?
RE: 2nd homes empty property tax rates - leilanidude - 03-03-2026
Having to pay G.E.T. on rentals also raises rents - counterproductive to affordable housing.
RE: 2nd homes empty property tax rates - HiloJulie - 03-03-2026
(03-03-2026, 10:05 PM)Durian Fiend Wrote:(03-02-2026, 05:24 PM)HiloJulie Wrote: GET Tax remittances.
In order to be a "legal" landlord in Hawaii, the owner who rents any such property must obtain a GET license.
Property would be considered as "un-rented," thus empty, when no GET tax is remitted for any given period.
So this wouldn't apply to residences owned by wealthy people who simply let the place sit vacant for months on end?
Yes.
But then, to be clear, I do not see a reason to give a wealthy person a tax break while their multi million dollar home sits vacant as they are off to some other place(s) in the world living in their multi million dollar home(s) there.
RE: 2nd homes empty property tax rates - ironyak - 03-04-2026
Looks like Hawaii County Bill 128 has passed, which creates a separate third tax tier for non-primary homes (i.e. empty properties, second and third homes, etc) worth over $4,000,000. Apparently there are about 840 properties worth a total of $5,000,000,000 (that's billion) that would be affected. Gives the County more flexibility to take a "kamaʻaina first" approach should they choose to and target tax adjustments for the most expensive properties on island as needed.
Locals can all break out the ukulele and do a little strumming.