For Sellers – How to Net More Money With a Slightly Lower Purchase Price

Conveyance Tax is an important aspect to consider during the sale and transfer of any property. Particularly for Sellers, it’s important to keep in mind what these tax brackets and rates are when setting the purchase price of your home to net more money.

What is Conveyance Tax?

Unless an exemption applies, the State of Hawai’i imposes a tax on the conveyances or transfers of real property and interests in real property by deed, lease, sublease, an assignment of lease, or other document (HRS §247-1).

What is the Basis and Rates of Conveyance Tax?

The tax imposed in the State of Hawai’i by section 247-1 shall be based on the actual and full consideration (whether cash or otherwise, including any promise, act, forbearance, property interest, value, gain, advantage, benefit, or profit), paid or to be paid for all transfers or conveyance of realty or any interest therein, that shall include any liens or encumbrances thereon at the time of sale, lease, sublease, assignment, transfer, or conveyance, and shall be at the following rates:

SCALE #1:

Applies to all transfers or conveyance of realty or any interest therein, except for a sale of a condominium or single-family residence where the purchaser is eligible for the county homeowners’ exemption. (increments of $100 of sale price will be added proportionately to tax)

• $0 > $600,000 = 10¢
• $600,000 > $1 Million = 20¢
• $1 Million > $2 Million = 30¢
• $2 Million > $4 Million = 50¢
• $4 Million > $6 Million = 70¢
• $6 Million > $10 Million = 90¢
• 10 Million and Above = $1.00

EXAMPLES:

Sales Price: $599,000 Conveyance Tax: $599
Sales Price: $600,000 Conveyance Tax: $1,200
Sales Price: $1,000,000 Conveyance Tax: $3,000

SCALE #2:

Applies to sales of condominium or single-family residence where the purchaser is not eligible for the county homeowner’s exemption. (increments of $100 of sale price will be added proportionately to tax)

• $0 > $600,000 = 15¢
• $600,000 > $1 Million = 25¢
• $1 Million > $2 Million = 40¢
• $2 Million > $4 Million = 60¢
• $4 Million > $6 Million = 85¢
• $6 Million > $10 Million = $1.10
• 10 Million and Above = $1.25

EXAMPLES:

Sales Price: $599,000 Conveyance Tax: $898.50
Sales Price: $600,000 Conveyance Tax: $1,500
Sales Price: $1,000,000 Conveyance Tax: $4,000

*This information was sourced from Fidelity National Title and Escrow of Hawai’i and is presented for informational purposes only and is deemed reliable but is not guaranteed. Please click here to download their informational flyer.

How Can I Save Money with a Slightly Lower Sales Price?

If you are selling your home, sometimes you can net more money with a slightly lower sales purchase price, knowing these Conveyance Tax price brackets.

For example, with a purchase price of $2 Million for a home for which the Buyer is not eligible for the homeowner’s exemption, the conveyance tax to be paid by the Seller would be $12,000.

If the sales price were $1,999,000, the conveyance tax would be $7,996.00, with a savings of $4,004.00.

As the purchase prices go up, the savings around these price brackets also increase. The applicable rates differ based upon whether the Buyer is eligible for the homeowner’s exemption, but the savings can be substantial either way.