HARPTA is the Hawaii Realty Tax Act (1990) which says that a sale of Hawaii Real Estate by a Non-Hawaii resident is subject to a Hawaii State Tax. The tax liability belongs to the seller, and 5% of the seller’s gross proceeds will be withheld and submitted to the State of Hawaii Department of Taxation. There are some exemptions from this withholding:

• Hawai'i Resident (Must fill out form N-289, which is provided to seller in opening instructions)
• Foreign corporations and partnerships which are registered to do business in the State of Hawai'i (Must fill out form N-289, which is provided to seller in opening instructions)
• Property used as principal residence for year prior to the sale and sales price does not exceed $300,000

FIRPTA is the Foreign Investment in Real Property Tax Act (1980) which says that the sale of United States real estate by a foreigner is subject to a federal tax. The tax liability belongs to the seller, and 10% of the seller’s gross proceeds will be withheld and submitted to the IRS. There are some exemptions from this withholding:

• Not a foreign person
• A foreign corporation may be exempt if it is registered to do business in the United States
• Transferee (buyer) acquires the property for use as a home and the sales price is not more than $300,000