Hawaii’s Real Estate Tax will hike to 3.8 percent in 2019, but experts say the hike won’t have as much of an impact on the real estate market as many are predicting.
The hike, which takes effect July 1, 2019, comes at a time when the island’s economy is recovering from the recession.
The real estate industry has suffered from a shortage of inventory.
It has seen a sharp decline in demand from local real estate developers.
In fact, the state has only been able to add about 15,000 new homes in the past six months.
That is expected to drop to about 3,200 homes by 2020, according to real estate agency Real Estate Board of Hawaii.
Real estate agents say the increase will hurt them.
“We have been seeing real estate agents in our offices closing and that’s because of the hike,” said Dan Naughton, CEO of the Hawaii Real Estate Association.
“There are a lot of people who will be out of business.
That’s a concern.”
Hawaii is one of the top five states in the country to have a real estate property tax, according the realty agency.
The state’s tax rate is about 2.5 percent.
Hawaii’s tax will increase to 3 percent in 2020.
“The new tax will not impact the value of our homes, nor will it affect the number of people purchasing our homes,” said Lisa Waddell, executive director of the Real Estate Council of Hawaii, which represents more than 1,000 real estate agencies.
The Real Estate Commission of Hawaii says the tax increase is needed to support a state budget that includes a $1.2 billion property tax increase for 2018.
“While this is a big step forward, it is not a silver bullet to address the state’s serious financial challenges,” the commission said in a statement.
The Hawaii Real Property Association, which has been fighting the increase, has been lobbying for it for months.
“This is a huge relief, but not enough,” said Kathy Hwang, the association’s executive director.
“A lot of the work has been done.
We need to be ready.”
The Real estate association also wants to see the state use its money to pay for infrastructure improvements in the islands’ capital.
Hawaii has been grappling with a long-term financial crisis, which the governor and the state legislature have failed to address.
The governor and legislature have yet to agree on a new budget for the state.