THE SENATE

S.B. NO.

19

THIRTY-FIRST LEGISLATURE, 2021

 

STATE OF HAWAII

 

 

 

 

 

 

A BILL FOR AN ACT

 

 

relating to taxation.

 

 

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

 


SECTION 1. Chapter 247, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"247-   Surcharge on conveyance of residential property by purchaser. (a) Any condominium or single family residence sold within a period of five years after the date of purchase and for which the owner is ineligible for a county homeowner's exemption on property tax shall be levied a surcharge equal to twenty-five per cent of the net proceeds from the sale.

(b) Any person or entity who sells a condominium or single family residence for which the person or entity is ineligible for a county homeowner's exemption on property tax and who sells the property within five years of the purchase shall notify the director of taxation in writing of the purchaser's intention. The notice shall specify the property's address, date of purchase, original purchase price, date of sale, and sale price. Within thirty days after the receipt of the notice, the director of taxation shall notify the person or entity in writing at the specified address the amount of taxes owed under this section, if applicable.

(c) The tax imposed by this section shall be paid at such place or places as the director of taxation may direct and shall be due and payable no later than ninety days after the taxable transaction, and in any event prior to the imprinting of the seal or seals as provided by section 247-5. Penalties and interest shall be added to and become a part of the tax, when and as provided by section 231-39.

(d) All proceeds from the surcharge shall be deposited into the dwelling unit revolving fund established pursuant to section 201H-191.

(e) The surcharge shall not be applicable to a sale under foreclosure by a mortgagee of any lot, or to the transfer of title by a mortgagee after foreclosure or otherwise to any agency of the United States government pursuant to the terms of any insurance or guarantee of mortgage loan by such agency, or to any subsequent purchaser.

(f) For purposes of this section, "date of purchase" and "date of sale" means the date of the agreement of sale or deed under which the property was purchased or sold, as applicable."

SECTION 2. Section 247-7, Hawaii Revised Statutes, is amended to read as follows:

"247-7 Disposition of taxes. [All] Except as provided under section 247‑  , all taxes collected under this chapter shall be paid into the state treasury to the credit of the general fund of the State, to be used and expended for the purposes for which the general fund was created and exists by law; provided that of the taxes collected each fiscal year:

(1) Ten per cent or $5,100,000, whichever is less, shall be paid into the land conservation fund established pursuant to section 173A-5; and

(2) Fifty per cent or $38,000,000, whichever is less, shall be paid into the rental housing revolving fund established by section 201H-202."

SECTION 3. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.


SECTION 4. This Act shall take effect on July 1, 2021.

 

INTRODUCED BY:

_____________________________

 

 


 


 

Report Title:

Surcharge on the Conveyance of Residential Property; Dwelling Unit Revolving Fund; Flipping Surcharge

 

Description:

Establishes a surcharge equal to twenty-five per cent of the net proceeds from the sale of certain residential property within a period of five years after the date of purchase if the owner is ineligible for a county homeowner's exemption on property tax.

 

 

 

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