Hawaii Home Closing Costs Guide

Hawaii home closing costs differ from mainland closings in several important ways — Hawaii state conveyance tax, HARPTA (Hawaii Real Property Tax Act) for non-resident sellers, escrow conventions, and Hawaii title insurance practice all affect the closing budget. This guide covers what buyers and sellers should expect when closing on a Big Island property in 2026.

Hawaii conveyance tax: 2026 rates and who pays

Hawaii imposes a state conveyance tax on every real estate transfer, codified at Hawaii Revised Statutes Chapter 247. The tax is paid by the seller at closing and is collected by the State of Hawaii Department of Taxation through the escrow/title closing process — the seller does not separately remit it. Hawaii conveyance tax applies to every transfer of real property in the state regardless of the buyer’s residency, the property location (Big Island, Maui, Oahu, Kauai), or whether the transaction is financed or cash.

The Hawaii conveyance tax rate is graduated on two axes: sale price bracket and the buyer’s intended use of the property. The buyer must declare on the Conveyance Tax Certificate (Form P-64A) whether they intend to use the property as their principal residence and qualify for the lower owner-occupant rate, or whether the property will be used as a second home, investment, or vacation rental and the higher non-owner-occupant rate applies. Misrepresenting intent to obtain the lower rate is a criminal offense; intent is verified post-closing via Hawaii income tax filings showing the property as the seller’s reported residence.

Hawaii conveyance tax rates as of 2026 (rates per $100 of consideration):

• Owner-occupant residential (buyer signs declaration of intent to occupy as principal residence for one year):
  • Under $600,000: $0.10 per $100 (0.10%)
  • $600,000–$1M: $0.20 per $100 (0.20%)
  • $1M–$2M: $0.30 per $100 (0.30%)
  • $2M–$4M: $0.50 per $100 (0.50%)
  • $4M–$6M: $0.70 per $100 (0.70%)
  • $6M–$10M: $0.90 per $100 (0.90%)
  • $10M and over: $1.00 per $100 (1.00%)
• Non-owner-occupant (investment, second home, vacation rental, any property without owner-occupant declaration):
  • Under $600,000: $0.15 per $100 (0.15%)
  • $600,000–$1M: $0.25 per $100 (0.25%)
  • $1M–$2M: $0.40 per $100 (0.40%)
  • $2M–$4M: $0.60 per $100 (0.60%)
  • $4M–$6M: $0.85 per $100 (0.85%)
  • $6M–$10M: $1.10 per $100 (1.10%)
  • $10M and over: $1.25 per $100 (1.25%)

Worked Hawaii conveyance tax examples (2026 rates):

• $1.2M Kailua-Kona village home, owner-occupant buyer: $1,200,000 × 0.30% = $3,600
• $1.2M same home, second-home/investor buyer: $1,200,000 × 0.40% = $4,800
• $3.5M Mauna Lani villa, second-home buyer: $3,500,000 × 0.60% = $21,000
• $8M Mauna Kea Resort estate, owner-occupant: $8,000,000 × 0.90% = $72,000
• $8M same estate, investor: $8,000,000 × 1.10% = $88,000
• $25M Kūki‘o oceanfront estate, second-home buyer: $25,000,000 × 1.25% = $312,500

Two practical notes for buyers and sellers budgeting around Hawaii conveyance tax: the tax is generally non-negotiable in the offer (sellers customarily pay it as Hawaii closing-cost convention), and the owner-occupant rate is unavailable to buyers using the property as a vacation rental, second home, or pure investment regardless of price tier. Current rate tables are published by the Hawaii Department of Taxation; this guide reflects the rates in effect for 2026 closings.

Escrow and title in Hawaii

Hawaii uses an escrow agent model — a neutral third party (typically a Hawaii title and escrow company) holds funds and documents, then coordinates with the title insurer to deliver clear title at closing. Escrow fees are typically split between buyer and seller per local custom (often 50/50 on the Big Island). Title insurance is customary on Hawaii closings, with the seller typically paying for the owner’s policy and the buyer paying for the lender’s policy if financing.

HARPTA for non-resident sellers

Hawaii Real Property Tax Act (HARPTA) requires non-Hawaii-resident sellers to have a percentage of the sale price withheld at closing as a prepayment of Hawaii state income tax on the transaction. The current HARPTA withholding rate is 7.25% of gross sale price (rate can change with legislation). The withholding is reconciled when the seller files their Hawaii non-resident income tax return for the transaction year — sellers may receive a refund if actual tax owed is less than withheld. Non-resident sellers should plan for HARPTA cash flow impact at closing and engage a Hawaii-specific CPA for the post-closing tax filing.

FIRPTA for foreign sellers

Foreign Investment in Real Property Tax Act (FIRPTA) requires withholding from foreign-person sellers at closing. The current FIRPTA withholding rate is 15% of gross sale price for transactions over $1M. FIRPTA applies on top of HARPTA, meaning foreign sellers face combined withholding around 22% of gross sale price. Foreign sellers should engage U.S. tax counsel before listing.

Typical buyer closing cost categories

• Lender origination and processing fees (if financing)
• Lender’s title insurance policy (if financing)
• Appraisal and inspection fees
• Buyer’s portion of escrow fees
• Recording fees
• Prorations for property tax, HOA fees, and any prepaid items
• Hazard insurance premium (typically annual prepayment)

Typical seller closing cost categories

• Hawaii state conveyance tax
• Owner’s title insurance policy
• Seller’s portion of escrow fees
• Real estate commissions (typically 5–6%)
• HARPTA withholding (non-resident sellers)
• FIRPTA withholding (foreign sellers)
• Outstanding HOA, special assessment, or repair credit obligations
• Repair credits or seller concessions negotiated

What to budget for a Big Island closing

Typical buyer closing costs (excluding loan-related items) run 1–2% of purchase price on cash purchases and 2–4% with financing. Typical seller closing costs run 7–9% of sale price including commission and conveyance tax for Hawaii-resident sellers, with non-resident sellers facing the additional HARPTA withholding (effectively a cash-flow item, not a permanent cost). Foreign sellers face the additional FIRPTA withholding on top.

Frequently Asked Questions

What is HARPTA?

HARPTA (Hawaii Real Property Tax Act) requires non-Hawaii-resident sellers to have a percentage of gross sale price withheld at closing as prepayment of Hawaii state income tax on the transaction. The current rate is 7.25% of gross sale price. Withholding is reconciled when the seller files their Hawaii non-resident income tax return.

How much is Hawaii conveyance tax?

Hawaii conveyance tax is graduated by sale price and the buyer's declared use. As of 2026 the rate runs from 0.10% (owner-occupant under $600K) to 1.25% (non-owner-occupant over $10M). Examples: a $1.2M home with owner-occupant buyer = $3,600; a $3.5M resort villa with second-home buyer = $21,000; an $8M Mauna Kea Resort estate with investor buyer = $88,000. The full graduated rate table is in the guide above.

Who pays Hawaii conveyance tax — buyer or seller?

The seller pays Hawaii conveyance tax at closing. It is collected by the State of Hawaii Department of Taxation through the escrow/title process — the seller does not separately file or remit. This is true for every real property transfer in Hawaii regardless of buyer residency, property location, or financing structure. Hawaii conveyance tax is generally non-negotiable in the purchase offer because Hawaii closing-cost convention assigns it to the seller.

Do owner-occupant buyers get a lower Hawaii conveyance tax rate?

Yes. A buyer who signs the Conveyance Tax Certificate (Form P-64A) declaring intent to use the property as their principal residence for at least one year qualifies for the lower owner-occupant rate. The owner-occupant rate is roughly two-thirds of the non-owner rate at every price tier. The owner-occupant declaration is verified post-closing through Hawaii income tax filings; misrepresenting intent to obtain the lower rate is a criminal offense.

Who pays escrow fees in Hawaii?

Hawaii escrow fees are customarily split between buyer and seller, often 50/50 on the Big Island. Specific allocation can be negotiated in the purchase agreement. The escrow company holds funds and documents, coordinates with the title insurer, and delivers clear title at closing.

What closing costs do Hawaii buyers pay?

Typical Hawaii buyer closing costs run 1–2% of purchase price on cash purchases and 2–4% with financing. Categories include buyer’s share of escrow fees, lender’s title insurance (if financing), appraisal and inspection fees, recording fees, prorations for property tax and HOA, and hazard insurance prepayment.

How does FIRPTA apply to foreign Hawaii sellers?

FIRPTA (Foreign Investment in Real Property Tax Act) requires 15% withholding on gross sale price for foreign-person sellers when the transaction exceeds $1M. FIRPTA applies on top of HARPTA, meaning foreign sellers face combined withholding around 22% of gross sale price. Foreign sellers should engage U.S. tax counsel before listing.