UPDATED | June 1, 2020:
Hawaii Cautiously Reopens to Low- and Medium-Risk Businesses
On May 18, Hawaii’s Governor David Ige signed an 8th supplemental emergency proclamation, unveiling a four-phase plan for reopening Hawaii’s economy, announcing that “medium-risk” businesses and activities would be allowed to resume operations in early June, with social distancing measures in place.
Hawaii has the lowest mortality rate in the country and one of the lowest rates of infection, thus far. For Hawaii visitors, it’s important to know that the proclamation extends the required 14-day quarantine for those arriving in Hawaii until June 30th. You can read more about the state’s four-phase recovery plan here.
Kauai Opportunity Zones – Proposed Extension to 2030
This week on Kauai, Kauai real estate agent Lori Decker reported on a proposed extension to the federal Opportunity Zone program. “The current Opportunity Zone legislation allows investors to defer and lower the tax owing on long-term and short-term capital gains earned from the sale of shares, a business, and real property to 2026, provided the gains are invested in certified opportunity zones,” said Lori in her blog. Newly proposed legislation precipitated by the global pandemic would extend the program to 2030.
Lori has been consistently reporting on the Kauai Opportunity Zones created by the Tax Cuts and Jobs Act (TCJA), passed in December 2017. The TCJA added more than 8,700 Opportunity Zones in all 50 states to the tax code. Designed to spur economic development, this program also introduced key tax incentives to benefit taxpayers who invest in Opportunity Zone properties.
Lori keenly identified key, desirable opportunity zones on Kauai and started sharing info with her clients about these appealing Kauai real estate investment opportunities. In April, Lori shared an upcoming June 2020 deadline for Qualified Opportunity Funds (QOFs) and identified a small cache of Kauai properties located in the South Kauai Opportunity Zone which may be a good fit for QOFs. Of particular interest to many investors is Kukui’ula on Kauai’s south shore.
For a brief background on the legislation, you can read Lori’s article published in October 2019: Sean Parker’s Opportunity Zones: A Hawaii Perspective.
Neal Norman’s Q1 Market Report for Kauai
Top-producing Kauai agent Neal Norman provided a surprising first-quarter market report in May. “The new year commenced with a strong real estate market on Kauai. Across most segments and most metrics, there were clear and significant increases compared to the first quarter of 2019. Island-wide residential volume was up more than 24% from $109M to $135M this year.
The number of transactions increased from 107 to 121 in Q1 on Kauai, as well. A few significant beachfront Hanalei Bay property sales in early April will be rolled into the sales dollar volume in the second quarter of this year. Neal noted that real estate sales are typically a lagging indicator of economic performance.