Bill > HB286

This bill aims to update the Individual Housing Account Program to help address Hawaii's affordable housing crisis by increasing the maximum tax deductions and account levels for first-time home buyers. The legislation would modify existing law to allow individuals to deduct a larger amount of money (the specific new dollar amount is left blank in the bill) from their gross income when contributing to an individual housing account intended to help purchase a first principal residence. The bill maintains key existing program features, such as requiring that funds be used for a residential property in Hawaii, mandating that the property be the individual's first home (not owned in the previous five years), and implementing a gradual income reporting mechanism where one-tenth of the distribution is reported as income each year for ten years. The account would continue to be held by a financial institution, with restrictions on fund withdrawals and specific conditions for avoiding tax penalties. Notably, the bill provides exceptions for total disability or death of the account holder. The changes are set to take effect on July 1, 2050, and will apply to taxable years beginning after December 31, 2025, giving lawmakers and financial institutions significant lead time to prepare for the new provisions.

Budget and Finance, Business and Industry, Housing and Urban Affairs

https://www.capitol.hawaii.gov/session/measure_indiv.aspx?billtype=HB&billnumber=286&year=2026