Who is required to collect and remit 7.25% of the gross sales price at closing to the Hawaii State tax payers office?
Under HARPTA (section 235-68, Hawaii Revised Statutes (HRS)), every buyer is required to withhold and pay to the Department of Taxation (Department) 7.25% of the amount realized on the disposition of Hawaii real property.
Can you avoid HARPTA taxes?
EXEMPTIONS ARE AVAILABLE IF YOU QUALIFY
If you can prove that no capital gains tax will be due on the transaction, the state will grant a waiver which exempts you from HARPTA withholding.
More Information on the HARPTA Withholding
HARPTA is like a “deposit” or a “retainer” to make sure you file and pay the required Hawaii Income, General Excise, and Transient Accommodations Taxes, as applicable.
The amount withheld is designed to be only a rough estimate and may not be anywhere near your actual tax liability.
If you have no gain at all on your Hawaii property sale, for example, and you are current on your GE and TA taxes you might get ALL of these withholding back as a refund.
If you DO owe capital gains, General Excise, and/or Transient Accommodations taxes, then it is possible that you might actually owe MORE tax than the amount withheld.
Home to Kailua-Kona, Holualoa, and Keauhou. Spectacular sunsets with a mix of island urban appeal with a village lifestyle.
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North Kohala rural and the oldest part of the island. Known as the cherished land. Birthplace of King Kamehameha I and Pololu Valley.
Once the playground for Hawaiian royalty now offers several resort lifestyles on beautiful white sand beaches along the famous Kona Coast.
Rural scenic and one of the most beautiful 50 miles stretches on earth. Home to migrating whales, steep cliffs, Waipi‘o Valley, and Hi'ilawe waterfall.
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Mauna Kea Resort
Legendary luxury at Kauna’oa Bay. Owners are invited to join the Club at Mauna Kea providing access to all resort and hotel amenities including pools, fitness centers, spa, dining, world class golf, and tennis.
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World class amenities, sandy beaches, ocean sports, spa, dining, two championship golf courses designed by Jack Nicholas and Tom Weiskopf exclusive golf memberships are available to owners.