Selling your Hawaii property might cost a little more after September 15, 2018.
- HARPTA is a Hawaii law that requires a withholding tax when you sell real estate in Hawaii, if you are not a resident of the state. Currently it's 5%.
- FIRPTA is a federal law that requires a withholding of 10% at closing, if you are not a resident of the country.
- Read more about HARPTA and FIRPTA here
It's going up:
This year a new law was passed to increase the HARPTA amount from 5% to 7.25% and you can read the announcement here. What it means is possibly a higher cost to out of state sellers, but if you are not making any capital gains you should be OK. It can get complicated if properties are owned by an LLC or company or other entity.
Once escrow opens, buyers and sellers will sign forms to verify their residency status and this is a good time to know whether or not you will be exempt. Please consult with a tax professional or financial advisor who can let you know the pros and cons of financial aspects of buying and selling properties in Hawaii.
Thanks for reading my Maui blog...
Buying or selling real estate on Maui? That's what I do. Let me help YOU.
Georgie Hunter R(S) e-Pro, Hawai'i Life Real Estate Brokers
127 Hana Hwy. #G, Paia HI 96779
E-mail or call/text: 808 283-0635