Yes, just like any other state, Sellers could endure a withholding tax in Hawaii when closing on their home or condo. Although Capital Gains are a good problem to have, will you be confronting a tariff when selling your Maui property?
Thanks to Fidelity National Title, they have been providing PDFs and documents to keep our clients apprised and current on the changing Hawaii Laws.
What is HARPTA? Hawaii Real Property Tax Act withholds 7.25% from any Non-Hawaii Resident or Entity who are selling with capital gains. Before you start to get anxious, there are waivers that Escrow will provide. In addition, if performing a 1031 Exchange, there are exemptions.
What is FIRPTA? Foreign Investment Real Property Tax Act withholds 15% from any Foreign Seller. Again, Escrow will help execute the appropriate paperwork for any applicable exceptions.
It is recommended & best practice to speak with a Certified CPA for tax questions, implications, or projections. Realtors & other professionals are not permitted to give tax advise but only to make one privy.
If you have any questions, prior to listing your property, phone Kimberly Drechsel directly. Not only will she provide a Seller’s Net Sheet, she will get you in contact with an accountacnt to discuss your opportunities & possibilities.