The Hawaii County Council recently passed a new budget targeting “luxury real estate” valued at $2 million+. Most of these properties are located along the west side of the island near Kona and within the Kohala Coast Resorts. The County approved a budget and tax scheme raising taxes on secondary homes on the additional value, that exceeds $2 million, approximately 18.38% or $13.60 per $1000 in value. The first $2m will be taxed at the same rate as last year or $11.10 per $1000 in value. No additional taxes were passed for all other classifications even though gross taxes could increase as the County’s Tax Valuations continue to climb upward. As an example, annual taxes on a $10 million home will increase by $20,000 to $131,000. Source: Hawaii County Real Property Tax Office website.

Filed under: Real Estate by Rick Oliver
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Hawaii voters will be asked this election season to vote on a constitutional amendment to allow the State of Hawaii to asses property taxes in addition to the County of Hawaii or other Counties within the State. In my opinion, it’s a terrible idea for multiple reasons. The number one reason is the amendment states that the assessment would only be on “investment property”. In addition the assessment, at least initially, would be used to “support public education”. A vast majority of “investment” residential real estate is owned by non State of Hawaii residents. Given that fact it’s obvious that these owners will have no say or vote on being additionally taxed much less how much tax. Taxation without representation has started a few wars to my knowledge and the easy way for these “investors” to “win” the “war” is to sell their properties and take their money to another State. Read the attached flyer for a few other reasons this is a bad idea even if for a great cause. Our struggling public sc...

Filed under: Real Estate by Rick Oliver
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The State of Hawaii announced June 29th that they were changing the rate on Withholding of Hawaii Real Property after September 15, 2018. Section 235-68, Hawaii Revised Statutes, requires every transferee or buyer of Hawaii real property to withhold and pay to the Department of Taxation a percentage of the amount realized on the disposition of the real property, unless the disposition is exempt from withholding. This is an amendment to 235-68 as it changes the withholding rate from 5% to 7.25%. A very cursory explanation of some of the exemptions include selling at a loss or the seller is a resident of Hawaii. Click here for a PDF of the announcement from the State of Hawaii. Click Here to view the State of Hawaii N-289 Form for Exemptions from withholding.

Filed under: Real Estate by Rick Oliver
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