Sales Tax when you sell property

[jdirgo]

The money goes directly to the State of Hawaii. We always tell people who live out of state who are purchasing property that, should they still be non-Hawaii residents when they decide to sell, they will be subject to this withholding.

Hawaii may be somewhat unique in this withholding. I would imagine that the reason that they don't do this for residents is because residents already file income tax forms in the state and those income tax forms include sales of property. It would be relatively easy for the state to catch if someone who lives here and files tax returns failed to report it, since the state is also the one that records transfers. For an out-of-state resident, even if they did catch it (and I imagine they would) it would require taking the person to court for the state to get its proper capital gains tax.

And FIRPTA is federal law for non-US citizens. Hawaii has nothing to do with that -- take it up with the IRS.

John Dirgo, R, ABR, e-PRO
Aloha Coast Realty, LLC
808-987-9243 cell
http://www.hawaiirealproperty.com