The Senate Ways and Means Committee unanimously approved a bill Thursday to generate extra cash for state government by increasing the state conveyance tax on multi-million dollar property sales.
The latest draft of House Bill 58 would also adjust the state inheritance tax by reducing the dollar value of inheritance that is exempt from the tax. Currently estates of $5.49 million or less are exempt from the tax, but the bill would limit that exemption to estates totaling $3.5 million or less.
The proposed conveyance tax increase in the bill would apply to sales of non-owner occupant properties worth $4 million or more.
Properties worth more than $4 million would see their conveyance tax double, the tax on sales for more than $6 million would triple, and sales of properties worth more than $10 million would quadruple.
Supporters of the bill contend it would require Hawaii’s wealthiest residents to pay a larger share of the cost of state government, making the tax system more fair.
However, the Chamber of Commerce Hawaii and others have warned the tax increases will do more harm to Hawaii’s economy just as the state is struggling to emerge from the pandemic.
The measure now goes to the full Senate for further consideration and a floor vote.
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