Local Politics
  1. Home
  2. US
  3. Hawaii
  4. Honolulu
  5. Issues

Homeowner Exemption Increase

At a glance

  • What: Bills 45 and 46 (2026), both "relating to real property taxation," raise the homeowner and kūpuna homeowner exemptions, cutting the taxable value of owner-occupied homes in response to rising property values (per Chair Waters).
  • Where it stands: both passed second reading on August 12, 2026, 8-0 with Tulba and Weyer voting aye with reservations (Dos Santos-Tam absent). Neither bill appears on the September 9 journal, and the records read do not show a third reading date.
  • Money: the Department of Budget and Fiscal Services told the Council the extra $20,000 homeowner exemption saves a typical taxpayer about $70 a year but costs the city about $4.95 million (Bill 45) and $5.5 million (Bill 46), nearly $10 million together. It urged a Permitted Interaction Group (PIG) to review property tax relief as a whole.
  • Next: third reading; a possible PIG on property tax relief.

First reading (July 8, 2026)

  • Tupola moved both bills; both passed 8-0 with Tulba absent.
  • Testimony on Bill 45: Billionaire (support), Iwasa (oppose), Kefalas of the Grassroots Institute of Hawaii (support), Armstrong (oppose). Bill 46: Billionaire and Kefalas (support), Iwasa (general comment).

Second reading (August 12, 2026)

  • Okimoto moved both committee reports (194(26) and 195(26)); Nishimoto seconded.
  • Testimony opposing: Iwasa and Waikoloa (both bills). Supporting: Sula of the Hawaii Ironworkers Stabilization Fund (both bills). Garry gave general comment on Bill 45.
  • Deputy Director Castle of Budget and Fiscal Services: real property tax is the city's largest revenue source; the exemptions plus the roughly $8 million already given through the low-income tax credit program would bring total relief near $20 million; collective bargaining raised salary costs by about $55 million in FY2026 with another $55 million projected for FY2027.
  • Weyer objected to incremental exemption increases without a broader plan, noted the prior increase was designed to be revenue neutral, and proposed a PIG. Tupola supported the bills and a broader review through a PIG.
  • Related: Property Tax Credit Eligibility (Bill 68 of 2025) and Bill 40 (2026) CD1 Real property taxation.

Sources

Log

2026-08-12 - Regular Council

Both bills passed second reading 8-0 (committee reports 194(26) and 195(26)); Tulba and Weyer aye with reservations. Budget and Fiscal Services gave the revenue figures above and backed a PIG.

2026-07-08 - Regular Council

Both bills passed first reading 8-0.