The empty homes tax that Honolulu has been mulling for seven years includes a gaping loophole and two unnecessary exemptions that could cost the city nearly $150 million in lost tax revenue over the next decade while keeping urgently needed housing off the market.
That is the finding of global consulting firm Ernst & Young, which is recommending forgoing those waivers, including protections for local residents, which the consultant says aren’t the way other cities handle things. In consultant speak, the presentation put together for the Honolulu City Council frames it this way: “Review of the ordinance indicates potential opportunities to better align the policy and implementation with other jurisdictions.”
Council members have long said their target is offshore investors who buy up housing with no intention of living here — planning to sell at a profit years later while counting on low property taxes in the meantime — not local residents, some of whom may have inherited second homes from family members…