June 3, 2026, 10 a.m.
Honolulu Hale
To: Honolulu City Council
Tommy Waters, Chair
Andria Tupola, Vice Chair
From: Grassroot Institute of Hawaii
Ted Kefalas, Director of Strategic Campaigns
RE: Bill 40 (2026) — RELATING TO REAL PROPERTY TAXATION
Aloha Chair Waters, Vice Chair Tupola and other members of the Council,
The Grassroot Institute of Hawaii supports Bill 40 (2026), which would allow buyers who purchase condo units designated as affordable housing by the state or city to immediately receive the homeowner exemption.
This bill addresses a discrepancy that arises when a homebuilder constructs an affordable housing project but does not immediately sell all of the units. The eventual owners of such units can sometimes find themselves paying property taxes in the Residential A tax class, which carries a much higher rate than the Residential class.
Even if the condo unit is in the Residential class, the homebuyer cannot access the homeowner exemption if they buy the property after the September 31 deadline to file for the exemption, which would stick them with higher tax bills for a year.
Residents who qualify for affordable housing tend to have lower incomes by definition. Reducing their tax bills by granting them immediate access to the Residential tax class rate and the homeowner exemption would reduce the financial strain associated with the purchase of a home.
Thank you for the opportunity to testify.
Ted Kefalas
Director of Strategic Campaigns
Grassroot Institute of Hawaii
1050 Bishop St. #508 | Honolulu, HI 96813 | 808-864-1776 | info@grassrootinstitute.org
