A Step Toward Balance in Hawaiʻi County’s Housing Landscape

A new proposal from the Hawaiʻi County Council is taking an important first step toward reshaping how high-value second homes are taxed across the island.

Under the measure, often referred to as Bill 128, the county is considering the creation of a Tier 3 residential tax category for non-owner-occupied properties valued above $4 million. The proposal recently passed its first reading, signaling early support for a more layered and equitable property tax system.

If adopted, the new tier would apply primarily to luxury second homes, many of which are located in West Hawaiʻi, and would build upon earlier changes that already introduced a higher tax bracket for properties valued over $2 million.

At its core, the proposal is designed to protect local homeowners while asking more from high-value, non-primary residences. Owner-occupied homes with exemptions would remain unaffected, helping to maintain stability for residents who call Hawaiʻi home year-round.

Supporters of the measure view it as a way to create better balance in the housing market, ensuring that those who benefit most from Hawaiʻi’s real estate landscape contribute more toward the services and infrastructure that sustain it. It also reflects a growing conversation across the islands about fairness, sustainability, and long-term housing access.

While final tax rates will be determined during upcoming budget discussions, the proposal opens the door for meaningful dialogue about how to support local communities, strengthen public resources, and thoughtfully manage growth in high-value property segments.

As the bill moves forward, it represents another step in Hawaiʻi County’s ongoing effort to align housing policy with the needs and priorities of the people who live and work here every day.

Source: Proposed new Hawaiʻi County tax rate for luxury second homes passes first reading