Report Title:

Conveyance Tax

Description:

Imposes a new conveyance tax on sales of residential condominiums and single family dwellings for $850,000 and more. (SD1)

THE SENATE

S.B. NO.

1010

TWENTY-THIRD LEGISLATURE, 2005

S.D. 1

STATE OF HAWAII

 


 

A BILL FOR AN ACT

 

RELATING TO CONVEYANCE TAX.

 

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

SECTION 1. Section 247-2, Hawaii Revised Statutes, is amended to read as follows:

"§247-2 Basis and rate of tax. (a) The tax imposed by section 247-1 shall be based on the actual and full consideration (whether cash or otherwise, including any promise, act, forbearance, property interest, value, gain, advantage, benefit, or profit) paid or to be paid, which shall include any liens or encumbrances thereon at the time of sale, lease, sublease, assignment, transfer, or conveyance, and shall be at the rate of 10 cents per $100 of such actual and full consideration; provided that in the case of a lease or sublease, this chapter shall apply only to a lease or sublease whose full unexpired term is for a period of five years or more, and in those cases, including (where appropriate) those cases where the lease has been extended or amended, the tax in this chapter shall be based on the cash value of the lease rentals discounted to present day value and capitalized at the rate of six per cent, plus the actual and full consideration paid or to be paid for any and all improvements, if any, which shall include on-site as well as offsite improvements, applicable to the leased premises; and provided further that the tax imposed for each transaction shall be not less than $1.

(b) In lieu of the rate under subsection (a), the tax rate on the sale of a residential condominium or a single family residence for $850,000 or more shall be as follows:

(1) 20 cents per $100 of the purchase price on sales of $850,000 to $1,000,000; and

(2) 30 cents per $100 of the purchase price on sales over $1,000,000.

Realizations from the tax under this subsection shall be paid to the housing and community development corporation of Hawaii and deposited into the housing finance revolving fund established under section 201G-170.

As used in this subsection:

"Residential condominium" means the ownership of single units, with common elements, located on property within a condominium property regime that is used for residential purposes.

"Single family residence" shall have the same meaning as in section 521-8."

SECTION 2. New statutory material is underscored.

SECTION 3. This Act shall take effect on September 1, 2005.