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Hawaii conveyance tax on leases11/11/2023 ![]() It has been my experience that the withholding is usually 5% of the sales price of the property. The seller may file a Certificate of Exemption with the State, or the seller may apply for a waiver on Form 288B, in which cases the buyer will not be required toĬollect the withholding. Under Hawaii law, if the seller of real property is a non-resident person or entity, the purchaser of the property must withhold a specified percentage of the "amount realized" by the seller and forward that amount with the appropriate form to the Department of Taxation. HARPTA Withholding for Non-Resident Sellers of Real Property There is also a very complete brochure at the State website which answers many questions about collecting both the General Excise Tax and the Transient Accommodations Tax and addresses some of the income tax issues. You must, in addition, pay income tax on rental income, whether you live in the State or outside the State. You may complete it online, print it and send it in with the appropriate registration fee(s). The Department of Taxation has the application on its website. ![]() To apply for the above licenses, you must complete the State's Basic Business Application. The Transient Accommodations Tax (T.A.T.) is currently 9.25%. If you have rental properties that you are renting to people short term (less than 180 days), you will also have to acquire a Transient Accommodations Tax license and pay the transient accommodations tax on your short term rentals. If you have rental properties in the State of Hawaii, you must get a General Excise Tax license and pay the excise tax on your rental proceeds. The tax to the retailer is currently 4% of the gross receipts, but because he collects the tax, he also pays tax on the 4%, so the retail general excise tax passed on to the consumer is 4.167%. It may look like a sales tax when you buy something in a store and you pay tax, but actually that is an example of the retailer passing the excise tax on to the consumer. The State's General Excise Tax (G.E.T.) taxes on the gross receipts or gross income individuals, corporations, partnerships, or other entities derive from their businessĪctivities in Hawaii. ![]() There is no sales tax in the State of Hawaii. State of Hawaii General Excise Tax and Transient Accommodations Tax and owning rental properties in Hawaii Additional information and the form(s) may be obtained using the links below. ![]() You must apply for the Homeowner Exemption. If you sell a home with a Homeowner Exemption on it, you must tell the county tax office that the exemption no longer applies to that property. Whatever exemption you have moves with you, the taxpayer, but you must do the "moving" yourself. The exemption is higher if you are over 60 years of age and/or if you are disabled. The basic Homeowner Exemption is $40,000, subtracted directly from the value assessed by the county on the property. You will save hundreds of dollars on your property taxes with the Homeowner Exemption in place. If you purchase a property in Hawaii County and are planning on living in it, please apply for the Homeowner Exemption. County of Hawaii Homeowner Exemption forms If you are looking for property on another island, taxes may differ as property taxes are set by the counties. The real property taxes for the county of Hawaii (the Big Island) can be found at the County of Hawaii Real Property tax site. Related to this is the General Excise Tax license and the Transient Accommodations Tax license. Related to Hawaii property taxes is the Homeowner Exemption for property owners who reside in their property.Ī second concern is what the taxes are if you are considering buying a property for rental income. One of the first questions people have when considering buying in Hawaii is about property tax.
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