SB1033 • 2026

RELATING TO TAXATION.

Housing Taxes

Active

The official status still shows this bill as active or still awaiting another formal step.

Sponsor: LEE, C.
Last action: 2025-12-08
Official status: Carried over to 2026 Regular Session.
Effective date: Not listed

Plain English Breakdown

Using official source text because the generated explanation was unavailable or could not be confirmed against the official bill text.

RELATING TO TAXATION.

What This Bill Does

RELATING TO TAXATION.
Excise Tax; Failure to Sell Excess Single-Family Residences; Housing Downpayment Trust Fund; Reports Establishes an excise tax on certain taxpayers who own excess single-family residences for failure to sell those residences.
Establishes and allocates excise tax revenues to the Housing Downpayment Trust Fund.
Requires annual reports to the Legislature.

Limits and Unknowns

This entry is temporarily using official source text because the generated explanation could not be confirmed against the official bill text during the last sync.

Amendments

These notes stay tied to the official amendment files and metadata from the legislature.

SD1

Hawaii published version SD1

Plain English: SB1033 SD1 THE SENATE S.B.

SB1033 SD1 THE SENATE S.B.
NO.
1033 THIRTY-THIRD LEGISLATURE, 2025 S.D.
1 STATE OF HAWAII A BILL FOR AN ACT RELATING TO TAXATION .

SD2

Hawaii published version SD2

Plain English: SB1033 SD2 THE SENATE S.B.

SB1033 SD2 THE SENATE S.B.
NO.
1033 THIRTY-THIRD LEGISLATURE, 2025 S.D.
2 STATE OF HAWAII A BILL FOR AN ACT RELATING TO TAXATION .

Bill History

2025-12-08 D
Carried over to 2026 Regular Session.
2025-03-06 H
Referred to HSG, FIN, referral sheet 19
2025-03-06 H
Pass First Reading
2025-03-04 H
Received from Senate (Sen. Com. No. 242) in amended form (SD 2).
2025-03-04 S
Report Adopted; Passed Third Reading, as amended (SD 2). Ayes, 25; Aye(s) with reservations: Senator(s) Fevella, Ihara, Inouye, San Buenaventura. Noes, 0 (none). Excused, 0 (none). Transmitted to House.
2025-02-28 S
48 Hrs. Notice 03-04-25.
2025-02-28 S
Reported from WAM/JDC (Stand. Com. Rep. No. 1045) with recommendation of passage on Third Reading, as amended (SD 2).
2025-02-26 S
The committee(s) on JDC recommend(s) that the measure be PASSED, WITH AMENDMENTS. The votes in JDC were as follows: 5 Aye(s): Senator(s) Rhoads, Gabbard, Chang, Awa; Aye(s) with reservations: Senator(s) San Buenaventura ; 0 No(es): none; and 0 Excused: none.
2025-02-26 S
The committee(s) on WAM recommend(s) that the measure be PASSED, WITH AMENDMENTS. The votes in WAM were as follows: 13 Aye(s): Senator(s) Dela Cruz, Aquino, Elefante, Hashimoto, Inouye, Kanuha, Kidani, Lee, C., Wakai; Aye(s) with reservations: Senator(s) Moriwaki, DeCoite, Kim, Fevella ; 0 No(es): none; and 0 Excused: none.
2025-02-21 S
The committee(s) on WAM/JDC will hold a public decision making on 02-26-25 10:05AM; Conference Room 211 & Videoconference.
2025-02-12 S
Report adopted; Passed Second Reading, as amended (SD 1) and referred to WAM/JDC.
2025-02-12 S
Reported from HOU (Stand. Com. Rep. No. 338) with recommendation of passage on Second Reading, as amended (SD 1) and referral to WAM/JDC.
2025-02-04 S
The committee(s) on HOU recommend(s) that the measure be PASSED, WITH AMENDMENTS. The votes in HOU were as follows: 4 Aye(s): Senator(s) Chang, Hashimoto, Kanuha, Fevella; Aye(s) with reservations: none ; 0 No(es): none; and 1 Excused: Senator(s) Aquino.
2025-01-31 S
The committee(s) on HOU has scheduled a public hearing on 02-04-25 1:00PM; Conference Room 225 & Videoconference.
2025-01-23 S
Referred to HOU, WAM/JDC.
2025-01-21 S
Passed First Reading.
2025-01-17 S
Introduced.

Official Summary Text

RELATING TO TAXATION.
Excise Tax; Failure to Sell Excess Single-Family Residences; Housing Downpayment Trust Fund; Reports
Establishes an excise tax on certain taxpayers who own excess single-family residences for failure to sell those residences. Establishes and allocates excise tax revenues to the Housing Downpayment Trust Fund. Requires annual reports to the Legislature. Applies to taxable years beginning after 12/31/2026. Effective 7/1/2050. (SD2)

Current Bill Text

Read the full stored bill text

SB1033

THE SENATE

S.B. NO.

1033

THIRTY-THIRD LEGISLATURE, 2025

STATE OF HAWAII

A BILL FOR AN ACT

relating
to taxation
.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

����
SECTION 1.
�
The Hawaii
Revised Statutes is amended by adding a new chapter to title 14 to be
appropriately designated and to read as follows:

"
Chapter

excise
tax on certain taxpayers failing to sell excess

single-family
residences

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�
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-1
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Definitions.
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Whenever used in
this chapter, unless the context otherwise requires:

����
"Applicable date" means:

����
(1)
�
The
last day of the first full taxable year ending on or after the effective date
of Act
����
, Session Laws of Hawaii 2025;
or

����
(2)
�
In
the case of any taxpayer that changes its status during a taxable year, the
last day of the taxable year immediately preceding the taxable year in which
the taxpayer changed its status.

����
"Applicable single-family
residence" means any single‑family residence that was acquired on or
before the applicable date.

����
"Applicable taxpayer" means a
taxpayer, including a partnership, corporation, trust or other legal entity,
that:

����
(1)
�
Manages
funds pooled from investors and is a fiduciary with respect to those investors;

����
(2)
�
Is
an asset manager in any of the following asset classes:

���������
(A)
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Public
equity or fixed-income securities;

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(B)
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A
hedge fund;

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(C)
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A
fund of hedge funds;

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(D)
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Private
equity (including venture capital);

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(E)
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A
fund of private equity funds;

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(F)
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A
real estate investment fund;

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(G)
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A
fund of real estate funds; or

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(H)
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Any
other asset class for which an applicable fiduciary-controlled entity engages
external asset managers; and

����
(3)
�
That
has $50,000,000 or more in net value or assets under management on any day
during the taxable year.

����
"Applicable taxpayer" shall not
include:

����
(1)
�
An
organization that is described in section 501(c)(3) and exempt from tax under
section 501(a) of the Internal Revenue Code; or

����
(2)
�
An
organization primarily engaged in the construction or rehabilitation of
single-family residences.

����
"Disqualified sale" means any
sale or transfer of a single‑family residence to:

����
(1)
�
A
corporation or other entity engaged in a trade or business; or

����
(2)
�
An
individual who owns any other single-family residence at the time of the sale
or transfer.

����
"Newly acquired single-family
residence" means any single‑family residence that was acquired by
the taxpayer in any taxable year beginning after the effective date of Act
����
, Session Laws of Hawaii 2025.

����
"Single-family residence" means a
residential property consisting of one to four dwelling units; provided that the
term shall not include:

����
(1)
�
Any
unoccupied single-family residence acquired through foreclosure;

����
(2)
�
Any
single-family residence that is:

���������
(A)
�
Not
rented or leased, and

���������
(B)
�
Used
as the principal residence of any person who has an ownership interest in the
applicable taxpayer; or

����
(3)
�
Any
single-family residence constructed, acquired, or operated with federal
appropriated funding sources.

����
"Trade or business" shall include
any activity treated as a trade or business under section 469(c)(5) or (6) of
the Internal Revenue Code (determined without regard to the phrase "To the
extent provided in regulations" in section 469(c)(6)).

����
�
��
-2
�

Imposition of tax.
�
(a)
�
In the case of an applicable taxpayer, there
is hereby imposed a tax on the acquisition of any newly acquired single-family
residence equal to fifty percent of the fair market value of the residence.

����
(b)
�

In the case of an applicable taxpayer who fails to meet the requirements
of subsection (c), there is hereby imposed a tax equal to the product of:

����
(1)
�
$50,000;
and

����
(2)
�
The
excess of the number of applicable single-family residences owned by the
taxpayer as of the last day of the taxable year, over the maximum permissible
units for the taxable year.

����
(c)
�

An applicable taxpayer meets the requirement of this subsection for any
taxable year if the number of applicable single-family residences owned by the
taxpayer as of the last day of the taxable year is equal to or less than the
maximum permissible units determined with respect to the taxpayer for the
taxable year.
�
For the purposes of this
subsection, a single-family residence that is sold or transferred in a
disqualified sale during the taxable year shall be treated as a single-family
residence that is owned by the applicable taxpayer as of the last day of the
taxable year.

����
�
��
-3
�

Maximum permissible units.
�

The maximum permissible units with respect to any applicable taxpayer
for any taxable year shall be determined as follows:

����
In the case of:
���������
The maximum permissible units

����������������������������
for an applicable
taxpayer is:

����
The
first full taxable
��
Ninety per cent of
the number of

����
year
beginning after
����
applicable
single-family

����
the
applicable date
�����
residences owned by
the taxpayer

����������������������������
on
the applicable date

����
The
second full taxable
�
Eighty per cent of
the number of

����
year
beginning after
����
applicable
single-family

����
the
applicable date
�����
residences owned by
the taxpayer

����������������������������
on
the applicable date

����
The
third full taxable
��
Seventy per cent of
the number of

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year
beginning after
����
applicable
single-family

����
the
applicable date
�����
residences owned by
the taxpayer

����������������������������
on
the applicable date

����
The
fourth full taxable
�
Sixty per cent of the
number of

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year
beginning after
����
applicable
single-family

����
the
applicable date
�����
residences owned by
the taxpayer

����������������������������
on
the applicable date

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The
fifth full taxable
��
Fifty per cent of the
number of

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year
beginning after
����
applicable
single-family

����
the
applicable date
�����
residences owned by
the taxpayer

����������������������������
on
the applicable date

����
The
sixth full taxable
��
Forty per cent of the
number of

����
year
beginning after
����
applicable
single-family

����
the
applicable date
�����
residences owned by
the taxpayer

����������������������������
on
the applicable date

����
The
seventh full taxable

Thirty per cent of
the number of

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year
beginning after
����
applicable
single-family

����
the
applicable date
�����
residences owned by
the taxpayer

����������������������������
on
the applicable date

����
The
eighth full taxable
�
Twenty per cent of
the number of

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year
beginning after
����
applicable
single-family

����
the
applicable date
�����
residences owned by
the taxpayer

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on
the applicable date

����
The
ninth full taxable
��
Ten per cent of the
number of

����
year
beginning after
����
applicable
single-family

����
the
applicable date
�����
residences owned by
the taxpayer

����������������������������
on
the applicable date

����
Any
taxable year
��������
Zero

����
beginning
more than

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nine
years after

����
the
applicable date

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�
��

-4
�
Construction.
�
(a)
�

For purposes of this chapter, an applicable taxpayer shall be treated:

����
(1)
�
As
acquiring a single-family residence if the applicable taxpayer acquires a
majority ownership interest in the single-family residence, regardless of the
percentage of that ownership interest; and

����
(2)
�
As
owning a single-family residence if the applicable taxpayer owns a majority
ownership interest in the single-family residence, regardless of the percentage
of that ownership interest.

����
(b)
�
For
the purposes of this chapter, all persons or entities that are treated as a
single employer under section 52(a) and (b) of the Internal Revenue Code shall
be treated as a single person or entity.

����
�
��

-5
�
Reporting.
�
(a)
�
The
director shall require any reporting as the director determines necessary or
appropriate to carry out the purposes of this chapter, including reporting with
respect to:

����
(1)
�
The
dates on which single-family residences owned by an applicable taxpayer were
acquired by the taxpayer; and

����
(2)
�
Whether
any person acquiring a single-family residence from an applicable taxpayer owns
any other single‑family residences at the time of the acquisition.

����
(b)
�

Any person who fails to report information required under subsection (a)
or who fails to include correct information in a report shall pay a penalty of $20,000;
provided that no penalty shall be imposed with respect to any failure if it is
shown that the failure is due to reasonable cause and not to willful
neglect.
�
The penalty under this subsection
shall be paid upon notice and demand by the director.

����
�
��
-6
�

Tax form.
�
Not later than one
hundred eighty days after the effective date of Act
��
, Session Laws of Hawaii 2025, the department
shall publish a form to be used for calculating the amount of tax owed under
this chapter.

����
�
��
-7
�

Certification.
�
(a)
�
The reporting required under section
��
-5(a)(2), shall include a certification from
each individual to whom a single-family residence is sold or transferred from
an applicable taxpayer.

����
(b)
�

The certification required under this section shall be signed by the
purchaser or transferee and state the following:

����
(1)
�
The
name and address of the purchaser or transferee;

����
(2)
�
That
the sale is not a disqualified sale; and

����
(3)
�
That
the purchaser or transferee will be subject to the penalty imposed under
section
���
-5(b) for any false
certification.

����
�
��
-8
�
Disposition
of tax revenues.
�
All revenues from
taxes collected under this chapter shall be deposited into the housing
downpayment trust fund established under section 201H- ."

����
SECTION 2.
�

Chapter 201H, Hawaii Revised Statutes, is amended by adding a new
section to part III, subpart A, to be appropriately designated and to read as
follows:

����
"
�201H-
��
��
Housing
downpayment trust fund.
�
(a)
�

There is established in the state treasury a fund to be known as the
housing
downpayment trust fund
, which shall be
administered by the corporation.
�
The
fund shall be held separate and apart from all other moneys, funds, and
accounts in the state treasury.

����
(b)
�
There shall be deposited into the fund the
following:

����
(1)
�
Excise
tax revenues allocated to the housing downpayment trust fund pursuant to
section
���
-8;

����
(2)
�
Gifts,
bequests, appropriations, or other contributions of money received by the
corporation for the purpose of providing downpayment assistance; and

����
(3)
�
All
interest earned or accrued on moneys in the fund.

����
(c)
�
All moneys in the fund shall be expended by
the corporation to establish new or supplement existing programs that provide
downpayment assistance to families purchasing homes within the State.
�
The corporation shall give priority to
families seeking assistance to purchase any single-family residence that is
sold or transferred by an applicable taxpayer, as defined in section
���
-1.

����
(d)
�

The corporation shall submit a report to the legislature, no later than
twenty days prior to the convening of each regular session, providing an
accounting of the receipts and expenditures of the fund.
"

����
SECTION 3.
�

New statutory material is underscored.

����
SECTION 4.
�

This Act shall take effect on January 1, 2026.

INTRODUCED BY:

_____________________________

Report Title:

Excise
Tax on Certain Taxpayers Failing to Sell Excess Single-Family Residences; Housing
Downpayment Trust Fund

Description:

Establishes
an excise tax on certain taxpayers who own excess single-family residences for
failure to sell those residences.
�

Establishes and allocates excise tax revenues to the Housing Downpayment
Trust Fund.

The summary description
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not legislation or evidence of legislative intent.