HARPTA
There is a 50/50 chance you don’t know what HARPTA is and/or you didn’t see it on the contract. Non-resident withholdings are uncommon across the country with only 17 states with the requirement so it’s important to have a conversation with your realtor about it. It is explained in section P-1 of the Hawaii Purchase Contract, which I’ve attached here:
“HARPTA” stands for the Hawaii Real Property Tax Act. This is the withholding of tax on the disposition of Hawaii real property by non-resident persons. The intent of HARPTA is to make sure that nonresidents comply with Hawaii’s Income Tax Law.
How Much is Withheld?
A tax withholding of 7.25% of the gross sales price. This is a lot of money, I know…
Refunds?
You can get a refund when you file a Hawaii income tax return after the end of the year or you can file a Hawaii Form N-288C for a tentative refund after closing. Refunds normally take 4-6 weeks except during the tax season.
More Information
Still have questions? www.harpta.com is a great website if you need additional information. Click here to connect with me! I would love to learn more about you and what your real estate needs are.
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