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THE SENATE |
S.B. NO. |
2575 |
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TWENTY-FIFTH LEGISLATURE, 2010 |
S.D. 2 |
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STATE OF HAWAII |
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A BILL FOR AN ACT
RELATING TO HOUSING.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
SECTION 1. The purpose of this Act is to create an anti‑speculation capital gains tax on the sale of real property held for less than twenty-four months, excluding the sale of real property that is owned by a resident and provides affordable housing rentals for a minimum period of time.
SECTION 2. Chapter 235, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:
"§235‑ Anti-speculation; capital gains tax. (a) In addition to the capital gains tax imposed under this chapter, there shall be an anti-speculation capital gains tax on the net capital gains realized by a seller of real property, less commissions, fees, and other charges, if any, related to the sale. The tax shall be as follows:
(1) If the real property was held by the seller for less than six months prior to the sale, the tax shall be sixty per cent of the capital gains tax owed;
(2) If the real property was held by the seller for at least six months but less than twelve months prior to the sale, the tax shall be thirty per cent of the capital gains tax owed; and
(3) If the real property was held by the seller for at least twelve months but not more than twenty-four months, the tax shall be fifteen per cent of the capital gains tax owed.
(b) This section shall not apply to:
(1) Real property sold to provide affordable rental housing for a period of not less than ten years to a resident, as defined in section 235‑1, earning less than one hundred forty per cent of the median Hawaii income, as determined by the department of taxation;
(2) A principal residence sold by reason of a change in place of employment, health, or unforeseen circumstances, as exempted under section 121(c)(2) of the Internal Revenue Code; or
(3) Amounts realized from properties that are involuntarily converted (destroyed, stolen, seized, requisitioned, or condemned), as exempted under section 1033 of the Internal Revenue Code.
(c) The sale of unimproved real property shall be subject to taxation under this section, unless otherwise prohibited under this section.
(d) The tax revenues realized pursuant to this section shall be deposited into an escrow account to be forwarded to the department of taxation. The department of taxation shall deposit:
(1) Fifty per cent of the revenues into the general fund; and
(2) Fifty per cent of the revenues into the rental housing trust fund under section 201H-202.
(e) This section shall not apply to properties that qualify the seller for a county homeowner's exemption or to military personnel selling property as a result of military relocation orders."
SECTION 3. New statutory material is underscored.
SECTION 4. This Act shall take effect on July 1, 2050.
Report Title:
Anti-Speculation Capital Gains Tax
Description:
Creates an anti-speculation capital gains tax on profits from the sale of real property held for less than twenty-four months, with exceptions. Directs revenues to be deposited equally in general fund and rental housing trust fund. Effective 7/1/2050.
The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.