Page 5 - Hawaii Top Flyers
P. 5
HARPTA - The Hawaii Real Property Tax
Act (1990) which says that a sale of Hawaii Real
Estate by a Non-Hawaii resident is subject to
a Hawaii State Tax. The tax liability belongs to
the seller, and 7.25% of the total sales price will
be withheld and submitted to the State of FIRPTA - Under current federal law, if a foreign person
Hawaii Department of Taxation. sells US real property, the buyer is obligated to withhold 10%
of the gross sales price and remit this to the lRS. However,
There are some exemptions from this pursuant to the Protecting Americans from Tax Hikes Act of
withholding: 2015, which became law on December 18, 2015 (the “PATH
Act”) the required 10% withholding will increase to 15%
for all closings occurring on or after February 17, 2016,
• Hawaii Resident (Must fill out form N-289, except those wherein the sales price is greater than $300,000
which is provided to seller in opening and does not exceed $1,000,000 and the buyer acquires
instructions) the property for use as a personal residence. Under the
• Foreign corporations and partnerships circumstance, a reduced withholding of 10% will apply.
which are registered to do business in the
state of Hawaii (Must fill out form N-289, Sales Price $300,000 or less and the buyer No
which is provided to seller in opening acquires as personal residence Withholding
instructions) Sales Price more than $300,000 but not
• Property used as principal residence for more than $1,000,000 and the buyer 10%
year prior to the sale and sales price does acquires as personal residence Withholding
not exceed $300,000 All transactions - Any Sales Price and the 15%
buyer NOT acquiring as personal residence Withholding
For more information on these taxes, please call
the appropriate departments or visit their website. In short, if a foreign person is selling a US real property
interest, the following parameters apply UNLESS THERE IS
HARPTA - State of Hawaii Department of AN EXCEPTION FROM WITHHOLDING:
Taxation: No withholding is required under the following circumstances:
Oahu 808.587.4242 • Buyer acquires for use as a personal residence and sales
Maui 808.984.8500 price not more than $300,000.
Kauai 808.274.3456 • Seller provides Non-Foreign Affidavit
Big Island-Hilo 808.974.6321 • Seller provides a Withholding Certificate from the IRS which
or visit www.hawaii.gov/tax
excuses the withholding
• The amount realized by the seller is zero
FIRPTA - Internal Revenue Service
www.irs.gov and search for FIRPTA • The property is acquired by the United States or a political
subdivision thereof
07/2021 | © 2021 Old Republic Title | OR1993-DI-HI |
Old Republic Title is providing this information as a free client service
and makes no warranties or representations as to its accuracy.
Old Republic Title strongly recommends consumers confer with their
title insurer as underwriting requirements vary among companies
and further, obtain guidance and advice from qualified professionals,
including attorneys specializing in Real Property, Trusts and/or Title
Insurance to get more detailed, and current, information as to any
particular situation affecting them.
