Hawaii taxes conveyances or transfers of real property and interests in real property unless an exemption applies. The tax is applied to the actual consideration paid or to be paid by assumption of loans (typically the sales price). Given the state’s large budget shortfalls, the legislature recently overrode Governor Lingle’s veto of a conveyance tax hike. The July 1, 2009 rate change will largely affect owners selling property for more than $2 million.
Based on the sales price and a signed buyer certification, escrow calculates the conveyance tax and pays it to the state at the time a document conveying real property is recorded at the Bureau of Conveyances. The person responsible for the tax is generally the person conveying the real property interest. The Hawaii Purchase Contract directs escrow to charge the conveyance tax to the seller. The state’s Conveyance Tax Certificate requires the buyer to certify the amount of consideration paid for the real property as well as the buyer’s eligibility for a real property tax exemption.
If you are in the process of selling a multi-million dollar property, I recommend you consult with your tax advisor and real estate professional to determine how the new legislation affects you.
New Rate Table
| Note 1 | Note 2 | |
| < $600,000 | $1.50 per $1000 | $1 per $1000 |
| $600,000 to $999,999 | $2.50 per $1000 | $2 per $1000 |
| $1,000,000 to $1,999,999 | $4 per $1000 | $3 per $1000 |
| $2,000,000 to $3,999,999 | $6 per $1000 | $5 per $1000 |
| $4,000,000 to $5,999,999 | $8.50 per $1000 | $7 per $1000 |
| $6,000,000 to $9,999,999 | $11.00 per $1000 | $9 per $1000 |
| > $10,000,000 | $12.50 per $1000 | $10 per $1000 |
Note 1 – Condo or single family residence and purchaser is not eligible for a county homeowner’s property tax exemption.
Note 2 – All other property unless exempt.
Contact Michael Zimmerman for more information on how this rate change may affect your home sale.
