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I am planning on selling my lot in Hawaiian Acres, and then reinvesting in another lot that is closer to a paved road. I have a couple of questions before putting it on the market that I hope someone can help me with:
I understand that as of January 2007, the Hawaii Department of Taxation is raising the tax for nonresidents from 5% to 8%. Does anyone know, if I plan on immediately reinvesting into another lot, if I can somehow avoid the tax hike?
If so, is there a time limit in which I need to buy in order to do this?
I also wanted to know what the average realtor commission rate for selling vacant land is in the area.
I appreciate your help/advice in advance.
Mahalo
Edited by - Sunny on 10/29/2006 18:42:39
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The HARPTA tax rate is being raised from 5% to 8.25%. Even if you reinvest in another lot, you are subject to this withholding. And it is a withholding, not a tax. If you file the proper forms with the state, you may get a portion of it back. It doesn't matter if you immediately reinvest, its still withheld except in some very specific cases (primary residence, etc).
Commissions on vacant land are negotiable, like all things relating to real estate. The guys who are willing to heavily discount the price of their services may be doing that for a reason -- their level of service may not be as high. If you need health care or tax preparation or other professional services, do you price shop for the cheapest guy, or do you want the one who will do the job well?
John Dirgo, RA, ABR, e-PRO
Island Trust Properties, LLC
808-987-9243 cell
http://www.hawaiirealproperty.com
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Thank you for the clarification on the HARPTA tax withholding.
I realize that there is negotiation as far as real estate commissions.
I'm not shopping for the cheapest, just inquiring on the market average commission fee.
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If any of us were to state that "the standard commission rate is X", we'd be guilty of violating anti-trust laws. There is no "standard commission" -- everything is negotiable.
John Dirgo, RA, ABR, e-PRO
Island Trust Properties, LLC
808-987-9243 cell
http://www.hawaiirealproperty.com
Posts: 2,652
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http://www.iconocast.com/News_Files/BNews1XA_X_06/Biz2.htm
The info supplied in the above link seemed very accurate. However, vacant land sales generally have a higher rate. An occasional arrangement in my area, is for the rate to be set at one rate if the listing agent or sometimes the listing agency sells it but a higher rate if it is sold by someone other than the listing agent or possibly the listing agency. While rates in all areas have been frequently discounted in recent years, I know an agent that consistently gets 10% on vacant land. She is probably worth it.
S. FL Islander to be
Edited by - oink on 10/30/2006 04:42:16
Pua`a
S. FL
Big Islander to be.
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quote:
I am planning on selling my lot in Hawaiian Acres, and then reinvesting in another lot that is closer to a paved road. I have a couple of questions before putting it on the market that I hope someone can help me with:
I understand that as of January 2007, the Hawaii Department of Taxation is raising the tax for nonresidents from 5% to 8%. Does anyone know, if I plan on immediately reinvesting into another lot, if I can somehow avoid the tax hike?
If so, is there a time limit in which I need to buy in order to do this?
I also wanted to know what the average realtor commission rate for selling vacant land is in the area.
I appreciate your help/advice in advance.
Mahalo
Edited by - Sunny on 10/29/2006 18:42:39
You might want to consider doing a Tax Deferred 1031 Exchange to avoid the withholding. There are certain time lines you have to follow but it's easy otherwise. (If you are not familiar with it feel free to call me.)
Aloha,
John S. Rabi, ABR,CM,CRB,FHS,PB,RB
http://www.JohnRabi.com
Typically Tropical Properties
75-5870 Walua Road, Suite 101
Kailua-Kona, HI 96740
(808)327-3185
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Thank you oink for the article on 'Average Commission Fees', it's exactly what I was looking for, and thank you Mr. Rabi, I will look into the Tax Deferred 1031 exchange. I thought I had heard of something like that. Now that I have a starting place on where and what to look for, I feel I will be better equipped to make informed decisions.
Mahalo
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