HARPTA increase to 7.25%

The State of Hawaii Department of Taxation has announced that the rate will increase from 5% to 7.25% of the sales price for the withholding of tax on the sale of Hawaii properties by non-Hawaii resident persons/entities on or after September 15, 2018.  This withholding is commonly known as “HARPTA”.  Its not a tax on the sale but the amount withheld from the seller’s proceeds from which a possibly tax due the State of Hawaii on a gain is paid.

The increase was anticipated since the Federal government increased “FIRPTA” (withholding for foreign sellers) from 10% to 15% effective for closings on or after February 16, 2016.

Department of Taxation Announcement No. 2018-11

Department of Taxation Announcement No. 2018-11

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