Key Takeaways
- Hawaii closings are typically conducted by escrow companies or title companies
- Conveyance tax is paid by the seller at rates ranging from \$0.10 to \$1.25 per \$100 depending on property value
- Title insurance is common and available from multiple underwriters in Hawaii
- HARPTA (Hawaii Real Property Tax Act) requires withholding from nonresident sellers
- Prorations are calculated as of the closing date for taxes, fees, and rents
Last updated: January 2026
Hawaii Closing Procedures
Hawaii real estate closings have specific requirements, taxes, and procedures.
Who Conducts Closings
In Hawaii, closings are typically conducted by:
| Provider | Role |
|---|---|
| Escrow companies | Most common |
| Title companies | Title insurance and escrow |
| Attorneys | Complex transactions |
Note: Unlike some states, Hawaii does not require attorney involvement in closings, though parties may choose to use attorneys.
Conveyance Tax
Tax Rates
Hawaii's conveyance tax is paid when property transfers. Rates vary by property value:
| Property Value | Rate (per $100) |
|---|---|
| Under $600,000 | $0.10 |
| $600,000 - $1,000,000 | $0.20 |
| $1,000,000 - $2,000,000 | $0.30 |
| $2,000,000 - $4,000,000 | $0.50 |
| $4,000,000 - $6,000,000 | $0.70 |
| $6,000,000 - $10,000,000 | $0.90 |
| Over $10,000,000 | $1.00 |
Note: Higher rates apply if transferring controlling interest in entity that owns property, or if no county surcharge.
Who Pays
| Tax | Customarily Paid By |
|---|---|
| Conveyance tax | Seller (negotiable) |
Calculation Example
Property sells for $800,000:
| Calculation | Amount |
|---|---|
| $800,000 ÷ $100 = 8,000 | 8,000 units |
| 8,000 × $0.20 | $1,600 conveyance tax |
HARPTA Withholding
Hawaii Real Property Tax Act
HARPTA requires withholding from nonresident sellers:
| Requirement | Details |
|---|---|
| Who is affected | Sellers who are not Hawaii residents |
| Withholding rate | 7.25% of gross sales price |
| Paid to | Hawaii Department of Taxation |
| Purpose | Ensure payment of Hawaii income tax |
Exemptions and Reductions
| Exemption | Description |
|---|---|
| Hawaii resident | No withholding required |
| Principal residence | May apply for reduced withholding |
| Exchange | 1031 exchanges may be exempt |
| Loss sale | May apply for exemption |
FIRPTA (Federal)
In addition to HARPTA, federal FIRPTA may apply:
| Requirement | Details |
|---|---|
| Who is affected | Foreign (non-US) sellers |
| Withholding rate | 15% of sales price |
| Paid to | IRS |
Title Insurance
Types of Policies
| Policy Type | Protects |
|---|---|
| Owner's policy | Buyer's ownership interest |
| Lender's policy | Lender's mortgage interest |
Who Pays
| Policy | Customarily Paid By |
|---|---|
| Owner's policy | Seller or negotiated |
| Lender's policy | Buyer |
Prorations
Common Prorations
| Item | How Prorated |
|---|---|
| Property taxes | Seller's share to closing date |
| Condo fees | Per diem calculation |
| Lease rent | If applicable |
| Rents (income property) | Credit to appropriate party |
Property Tax Calendar
| Date | Event |
|---|---|
| January 1 | Assessment date |
| August 20 | 1st half taxes due |
| February 20 | 2nd half taxes due |
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Test Your Knowledge
What is the HARPTA withholding rate for nonresident sellers in Hawaii?
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Test Your Knowledge
What is the conveyance tax rate for a property selling for $800,000 in Hawaii?
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D