Understanding Hawaii’s Transfer Tax: A Quick Guide
Learn about the Hawaii transfer tax: Understand how it affects your property sale and learn about possible exemptions.
If you’re selling a home in Hawaii, you may need to factor in the Hawaii real estate transfer tax. This government fee is charged when property ownership changes hands, and it’s a common part of sellers’ closing costs.
In this short guide, we’ll cover transfer taxes, how they work in Hawaii, and what you might owe when you sell. We’ll also outline state and local tax rates, possible exemptions, and other fees that could apply.
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What are transfer taxes?
Real estate transfer taxes are government fees applied when the ownership of a property changes hands. According to the Federal Trade Commission, these taxes are charged at the state or local level when a home’s title — the legal document showing ownership — is officially transferred to a new owner.
The amount you’ll owe depends on where your property is located, as tax rates and rules vary by state, county, and city. Like property taxes and other transaction-based fees, transfer taxes are a way that governments generate revenue to fund public services and infrastructure.
Who pays for transfer taxes?
If you sell your home in Hawaii, do you have to pay a transfer tax? Does the buyer? Ultimately, the responsibility of transfer tax costs depends on the state, county, or city where the transaction is taking place.
In Hawaii, the seller is responsible for paying any transfer taxes, though the amount depends on the property’s sale price and the buyer’s intended use. The buyer must inform the seller in the transaction contract if this intended use changes for any reason.
