Bill > SB1405

This bill provides a tax exemption for developments of homestead lots or housing for the Department of Hawaiian Home Lands (DHHL), specifically exempting amounts related to planning, design, financing, and construction activities from general excise and use taxes. The exemption applies to projects developed under government assistance programs, through nonprofit organizations providing housing for Native Hawaiian families, or for affordable rental housing where at least 50% of units are for households at or below 80% of the area median income. To qualify, projects must be for homestead lots, which are residential, agricultural, or pastoral lots awarded under the Hawaiian Homes Commission Act. Claimants must file exemption claims with the DHHL, which will then forward them to the Department of Taxation. The bill requires the DHHL to submit annual reports to the Legislature for five consecutive years (2027-2031) detailing the cost savings, reinvestments, and housing production increases resulting from this tax exemption. The bill is designed to support affordable housing for Native Hawaiians by reducing tax burdens on housing development projects, and will take effect on January 1, 2026.

Budget and Finance, Government Affairs

https://www.capitol.hawaii.gov/session/measure_indiv.aspx?billtype=SB&billnumber=1405&year=2026