Bill > SB2552

This bill, effective July 1, 2050, and applying to taxable years beginning after December 31, 2026, aims to address Hawaii's affordable housing crisis by increasing the financial benefits of the Individual Housing Account Program, which helps first-time homebuyers save for down payments and closing costs. Specifically, it significantly raises the maximum annual deduction for contributions to these accounts from $5,000 to $17,200 for individuals and from $10,000 to $34,400 for married couples filing jointly. The total lifetime contribution limit for these accounts is also increased from $25,000 to $86,000. The bill also updates the definition of a "first principal residence" to clarify that it must be owned and occupied as the individual's only home and that the individual (or their spouse, if married) must not have had an interest in another residential property within the last five years before opening the account. Additionally, it modifies the rules regarding the reporting of distributions from these accounts when a property is sold, generally spreading the taxable income over ten years and imposing a ten percent tax liability on the total distribution if the property is sold before that period concludes, with exceptions for death or total disability.

Budget and Finance, Housing and Urban Affairs

https://www.capitol.hawaii.gov/session/measure_indiv.aspx?billtype=SB&billnumber=2552&year=2026