Senate Bill 34 is scheduled for a hearing Tuesday.

Sen. Brenton Awa is proposing a new tax credit for people who sell their homes to Hawaii residents who may often find themselves fighting out-of-state homebuyers for housing. 

He’s proposing changes to one of his bills, Senate Bill 34, which originally sought to drastically increase the sales tax on homes to out-of-state buyers. A hearing for the bill is scheduled for Tuesday.

View of Keoneula Boulevard homes and the dark gray trash bins down a driveway that runs parallel with the boulevard.
The Senate will consider a bill to incentive selling homes to Hawaii residents. Cory Lum/Civil Beat/2022

Hawaii currently withholds a tax that requires nonresidents to pay to the state Department of Taxation 7.25% of the amount they profit from the sale of any property in the state, according to the Tax Facts 2010-11. Awa and his team were advocating to increase that amount to get it as close as 100%, in hopes of dissuading nonresidents from buying from the start. The original draft of SB 34 would raise that tax to 75%.

But at a hearing on Feb. 7, state Tax Director Gary Suganuma said that proposal may “call into question some legal issues.” The tax department’s written testimony called the 75% tax rate “excessive.”

Awa said his goal remains the same with the new draft of SB 34.

“At the end of the day,  the big picture goal is to make sure that local people can remain here and we have opportunities,” Awa said.

In 2018, proposed a bill that would ban foreign home purchases, but it never got a hearing.

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