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::Real Estate Tax Information::
Hawaii State Taxes
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Conveyance Tax (Chapter 247): In actual and full consideration paid for the transfer of realty, including leases and subleases, a tax of 10¢ per $100 is imposed for conveyances under $600,000; 20¢ per $100 for conveyances between $600,000 and $1 million; and 30¢ per $100 for conveyances in excess of $1 million. Also imposes a conveyance tax for condominiums or single family residences that do not qualify for a homeowners= exemption: 15¢ per $100 for properties valued up to $600,000; 25¢ per $100 for properties valued between $600,000 and $1 million; and 35¢ per $100 for properties valued at over $1 million. Minimum tax on each transaction is $1.00. Certain exemptions are allowed. Distribution: 35% to state general fund, 10% to the land conservation fund, 30% into the rental housing trust fund, and 25% into the natural area reserve fund.
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Property Tax: The amount of an owner's tax bill is determined by multiplying the assessed value by the tax rate for that category of property. Tax rates are set by the City Council in May. Owners who want to challenge their assessments have until Jan. 15th to file an appeal with the city's Board of Review or the State Tax Appeal Court. Property taxes are paid biannually, and the due dates are February 20th and August 20th. For more detailed information on Oahu property tax visit http://www.honolulupropertytax.com/
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In Hawaii, if your home is your principal home, you can claim for home exemption for tax purposes. For more details and the home exemption claim for please visit http://www.honolulu.gov/rpa/bfsrpp3.pdf.
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General Excise Tax: a tax imposed on business activity in Hawaii. This tax is often called a "gross income tax" because the tax is computed on the business' total gross income derived from doing business in Hawaii and not on the business' net profit. A 4% tax is imposed on all business activities: retailing of goods and services, contracting, renting or leasing real property or tangible/intangible personal property, sale of tangible personal property, interest income, commissions, and theatres and amusements. Hawaii does not have a state sales tax, therefore the GET is imposed on the business rather than the consumer.
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Transient Accommodation Tax (TAT): An additional tax of 7.25% will be added to all transient accommodations (lodging for less than a month) in the following establishments: apartments, hotels, motels, hostels, tourist homes, and lodging houses.
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County Surcharge Tax (Oahu only): The county surcharge tax is a new 0.5% additional tax added to the general excise tax to fund Oahu’s mass transit system. It is effective as of January 1, 2007. When added to the 4.0% general excise tax rate, the total tax rate is 4.5%.
Federal Taxes
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Capital Gains Tax: is a tax charged on capital gains, the profit realized on the sale of a non-inventory asset that was purchased at a lower price. The most common capital gains are realized from the sale of stocks, bonds, precious metals and property. Not all countries implement a capital gains tax and most have different rates of taxation for individuals and corporations.
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Two-Year Tax Exclusion: Individuals can exclude up to $250,000 in profit from the sale of a main home (or $500,000 for a married couple) as long as you have owned the home and lived in the home for a minimum of two years. Those two years do not need to be consecutive. In the 5 years prior to the sale of the house, you need to have lived in the house for at least 24 months in that 5-year period. In other words, the home must have been your principal residence. You can use this 2-out-of-5 year rule to exclude your profits each time you sell or exchange your main home. Generally, you can claim the exclusion only once every two years. There are some exceptions to this for those who do not meet the minimum 2 year time requirement. These conditions include: hardships including a change of employment, health problems, military service, and unforeseen circumstances like natural disasters and acts of war.
Non-Resident & Foreign Taxes
- HARPTA: Hawaii Real Property Tax. An amount withheld by the buyer from the sale of Hawaii property belonging to a nonresident seller.
- FIRPTA:Under the Foreign Investment of Real Property Act, every buyer must, unless an exemption applies, deduct and withhold 10% of the gross sales price from seller's proceeds and send it to the Internal Revenue Service, if the seller is a "foreign person" under that statute.
H & R Block Tax Calculators
We are not tax professionals, this information is provided for guidance only. We STRONGLY SUGGEST that you contact your tax professional or attorney
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