HARPTA Could Be A Surprise For A Honolulu Seller

June 4th, 2009 categories: For Buyers, For Sellers

If you are not a resident of Hawaii and you are thinking about selling a property that you own here, then beware of the withholding tax under HARPTA Tax Law. Here is the short and simple version of the law. If a non-resident of Hawaii sells a property not exempt from HARPTA, then 5% of the property sales price must be sent to the State of Hawaii. The State of Hawaii will hold the 5% until the Seller files a tax return on the sale. Should capital gains taxes be due from the sale, and then the withheld amount will apply those taxes. If the amount withheld is greater than the taxes due, the State will refund the unused balance. Unless a party is exempt from HARPTA, I am not aware of a way around the withholding of the 5%. THE PURPOSE THIS BLOG IS INFORMATIONAL AND SHOULD NOT BE USED AS TAX ADVICE. PLEASE SEEK AND RELY UPON TAX ADVICE FROM YOUR OWN TAX PROFESSIONAL.

If you have no capital gain and if you make your application in advance to the State of Hawaii, you may be able to get an exemption from the withholding. The keys are to know what you paid, what you are selling for and applying for the exemption well in advance of the close of escrow.

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If you would like to discuss your real estate needs, feel free to call me at 808-737-2093 or toll free at 877-737-2093. You can email me at keahi@lava.net

This entry was posted on Thursday, June 4th, 2009 at 10:41 am and is filed under For Buyers, For Sellers. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.