Conveyance of Real Property Definition: A Crucial Aspect of Hawaii's Short-Term Rentals Debate

The conveyance of real property definition plays a significant role in Hawaii's ongoing debate surrounding short-term rentals (STRs). In recent years, the state has grappled with the issue of STRs and their impact on the local housing market. As part of its efforts to address this problem, the Hawaii Legislature has proposed legislation that would exempt qualifying STRs from conveyance tax when sold to individuals who meet certain criteria.

According to the proposed bill, HB2416/ SB3105, a qualifying individual must not have a direct or indirect ownership interest in any other real property and must not be an immediate family member of any owner of the property. This means that only individuals who are truly separate from the current property owners can benefit from this exemption.

The conveyance of real property definition is crucial in this context because it helps to ensure that the tax incentive is targeted towards individuals who genuinely intend to use the property as their primary residence, rather than simply flipping it for a profit. By exempting qualifying STRs from conveyance tax, the state aims to encourage the conversion of these properties into long-term housing options for locals.

However, not everyone agrees with this approach. Some argue that offering tax incentives to owners of STRs may not be enough to solve Hawaii's housing crisis, which is characterized by high median home prices and rents. They point out that the state has a persistent shortage of affordable housing options, and that any attempt to convert STRs into long-term rentals must be part of a broader strategy to address this issue.

Governor Josh Green has vowed to sign into law any bill that would transform STRs and vacant investment properties owned by nonresidents into housing for locals. To achieve this goal, he is offering a carrot-and-stick approach, where owners who participate in the program will receive tax incentives and property tax exemptions, while those who do not comply may face penalties.

In conclusion, the conveyance of real property definition is a critical aspect of Hawaii's short-term rentals debate. By exempting qualifying STRs from conveyance tax, the state aims to encourage the conversion of these properties into long-term housing options for locals. While some argue that this approach may not be enough to solve Hawaii's housing crisis, others believe that it is an important step towards increasing the state's housing stock and decreasing rents for Hawaiians. Ultimately, the success of this program will depend on its ability to effectively address the root causes of Hawaii's housing crisis and provide affordable housing options for local residents.

Conveyance of real property definition