Hawaii Luxury Tax Fight Targets Pricey Home Sales
How Hawaiʻi Island’s Luxury Tax Proposal Works At its core, Hawaiʻi County Council Bill 128 would create a third residential property tax tier aimed at non-owner-occupied homes assessed above $4 million. The measure passed its first Council reading with seven ayes after introduction by Jennifer Kagiwada and James Hustace. Backers say the proposal targets about 842 ultra luxury homes on Hawaiʻi Island. Current Structure Under Pressure Hawaiʻi County now uses two tiers for higher-value residential property taxation. Tier 1 taxes homes under $2 million at $11.10 per $1,000, while Tier 2 applies $13.60 per $1,000 above that threshold. Primary residences with a home exemption remain taxed at $5.95 per $1,000. In 2025, investors nationwide increasingly treated regulatory risks as a core underwriting factor when evaluating residential assets. New Tier Focus Bill 128 is designed to advance tax equity and improve revenue allocation for housing and homelessness programs. The exact Tier 3 rate ...