As an experienced buyer’s agent, Steven knows the importance of communication and attention to detail is in every transaction, especially if you are purchasing from off-island. There are many differences and challenges when purchasing real estate in Hawaii. It is important to have professional representation to protect your interests. Steven has helped countless clients purchase property in Hawaii and wants to extend his personal services to you.
Over the past decade Steven’s business has continued to grow thanks to the many personal referrals from their satisfied clients. After using his services, he is confident that you will want to refer him to your friends and family as well. You are invited to browse through the Client letters and testimonials to ensure that you have made the right choice for your investment.
If you purchase a fee simple property, you own the land and the improvements on it. This represents the majority of real estate you will probably encounter.
If you purchase a leasehold property, you are buying a lease for land and, usually, you own the improvements, such as a house. Residential and land leases are usually set to expire on a specific date. Banks, when lending on leasehold property, require a minimum number of years left on a lease. The typical term of loan would be to five years before the year the lease expires. For example, if there are 30 years remaining on a lease, the banks would probably only allow a 25-year loan term.
Why would anyone want to buy leasehold property? It is often less expensive to purchase and often depreciable, which may hold tax advantages.
What is the property tax rate?
The improved residential property tax rate is $9.10 per $1,000 of assessed value for non-owner occupants and $5.55 per $1,000 of assessed value for owner occupants. You might also receive additional exemptions for owner occupant status and age. Hawaii property taxes are paid on a semi-annual basis.
When bringing in common household animals and pets to the islands, they must first go through the quarantine process. The typical quarantine period is 30 days. There is a kennel on the east side of the Big Island that allows frequent visits. The amount of money and time you are willing to spend will determine the length of time in quarantine. It is best to visit the website below and talk to your veterinarian for advice.
You will need to contact a local shipping company for quotes. They will generally charge based upon a preset volume. You may also have a choice as to which port your belongings and car will arrive. There are tow ports on the island, one in Hilo and the other in Kawaihae. You may also need to arrange transfer from the dock to your residence. Please remember that you will probably get what you pay for, so try to use a company that someone can recommend. The least expensive may not always be the best. Generally shipping will take anywhere from 2 to 3 weeks. Costs will vary.
Since temperatures in Hawaii can range between 70 and 88 degrees year round, you will probably not need any form of heating. However, if you prefer the comfort of air-conditioning, you can expect to pay a higher electric bill than normal. Your main utilities are electric, water, phone, sewer (if applicable) and cable. Natural gas is not provided on the island. People who prefer gas install propane tanks on their property. Solar, of course, is a great alternative for heating water and saves money in the long run. Here are a few numbers and websites to get you started...
Prior to shipping your vehicle to Hawaii, you may wish to compare costs with new and used vehicles on the island. Shipping from the West Coast for an automobile can start at about $900-$1,100 per vehicle.
Prior to Selling your Hawaii Property as an out of state or foreign resident please consider the following tax withholdings when real estate planning.
FIRPTA (Foreign Investment in Real Property Tax) and HARPTA (Hawaii
Real Property Tax Act) relate to tax payments due from sellers who are
not residents of the United States or of Hawaii, respectively.
FIRPTA -Requires that if the seller is a foreign person, the
buyer must withhold 10% of the amount realized by the seller to cover
any seller tax liability. Residences below $300,000 that are going to
be occupied by the buyer are exempt from this provision.
HARPTA -Requires every buyer of Hawaii real property to deduct
and withhold from the non-resident seller's proceeds, 5% of the gross
amount realized on the sale to be applied to any Hawaii income tax due
from the seller with regards to the sale of the property. A buyer would
be exempted from this requirement if the seller furnishes the buyer
with an affidavit stating that the seller is a resident (includes
resident aliens), together with his taxpayers identification number..."
[from Vitousek et al, Principles and Practices of Hawaiian Real Estate,
Honolulu, HI, 1995.]
Because of the strict deadlines and penalties associated with
these laws, your agent and your escrow company will make sure you are
fully compliant.
