Yes, you can buy property in Hawaii. The state imposes no residency or citizenship requirements, and foreign nationals go through the same purchase process as U.S. citizens. What makes Hawaii different is not who can buy, but what you’re buying: ownership structures, tax rates, zoning classifications, and environmental risks that mainland buyers rarely encounter and often underestimate.
You don’t need to live in Hawaii, hold a specific visa, or establish residency before buying. Foreign buyers can purchase while visiting on a tourist visa, and owning property alone does not grant immigration status. The complications show up later, mostly in taxes and in restrictions on how you can use the land. Work through the sections below before you make an offer.
Fee Simple vs. Leasehold Ownership
Hawaii has two forms of property ownership, and confusing them is an expensive mistake. About 98% of listings are fee simple, meaning you own the land and everything on it outright, with the right to use, sell, or pass it to heirs indefinitely, subject to zoning and deed restrictions. This is the standard ownership most mainland buyers expect.
Leasehold is a distinctly Hawaiian arrangement where you buy the building or condo unit but lease the land underneath from a separate landowner. The lease runs for a set period, and you pay ground rent on top of your mortgage. When the lease expires, the land and often the improvements revert to the landowner.1Justia. Hawaii Revised Statutes Title 13 Chapter 205 Section 205-2 – Districting and Classification of Lands Ground rent typically renegotiates every 10 to 20 years and can jump substantially at each reset.
Leasehold units cost significantly less upfront than comparable fee simple ones, which makes them tempting. But value erodes as the lease term shrinks. Once the remaining term drops below about 30 years, both resale value and financing options collapse. Fannie Mae requires the lease to extend at least five years beyond the mortgage maturity date, so a 30-year loan needs roughly 35 years of remaining term.2Fannie Mae. B2-3-03 Special Property Eligibility and Underwriting Considerations Leasehold Estates If you’re looking at leasehold, the remaining term and the next rent renegotiation date matter far more than the sticker price.
Hawaii law does provide mechanisms for converting leasehold interests to fee simple ownership under HRS Chapter 516, but the process requires cooperation from the landowner or government action, and the incentives that drove past conversions have largely expired.3Justia. Hawaii Revised Statutes Title 12 Chapter 171 Section 171-50-2 – Exchanges for Conversion of Leasehold Lands to Fee Simple Ownership
Property Taxes Are Much Higher If You Don’t Live There
Hawaii’s property tax rates vary by county, and every county charges non-owner-occupants substantially more than residents. The gap catches mainland investors off guard.
For fiscal year 2026 (July 2025 through June 2026), the rates per $1,000 of assessed value are:4Real Property Assessment Division. Real Property Tax Rates for Tax Year July 1, 2025 to June 30, 2026
- Honolulu (Oahu): residential properties are taxed at $3.50 per $1,000. Non-owner-occupied residential above $1 million jumps to $11.40.
- Maui: owner-occupied homes up to $1.3 million pay just $1.65 per $1,000. Non-owner-occupied properties start at $5.87 and reach $17.00 above $3 million.
- Kauai: owner-occupants pay $2.59 per $1,000. Non-owner-occupied ranges from $5.45 to $9.40 depending on value.
- Hawaii County (Big Island): homeowner-occupied properties pay $5.95 per $1,000. Non-owner residential starts at $11.10 and climbs to $13.60 at $2 million or more.
If you’re buying as a vacation-home owner or investor, your annual property tax bill could be several times what a resident would pay on the same property. On Maui, a $2 million non-owner-occupied home faces an effective rate more than five times the owner-occupant rate. Budget accordingly.
Closing Costs, HOA Fees, and Conveyance Tax
Expect closing costs of 2% to 5% of the purchase price, covering loan origination, appraisal, title insurance, escrow, and recording. On a $750,000 condo, that’s roughly $15,000 to $37,500 on top of the price.
Hawaii also imposes a conveyance tax on property transfers under HRS Chapter 247, paid at closing, with rates that increase at higher price tiers. Who pays the conveyance tax is sometimes negotiated, so confirm the split in your contract.
HOA fees deserve special attention if you’re looking at condos. Hawaii’s condo fees are among the highest in the country, commonly running $400 to $1,500 per month depending on the building’s age, location, and amenities. Older buildings with deferred maintenance or upcoming special assessments push costs higher. Request the HOA’s financial statements and reserve study before making an offer. A low purchase price means nothing if monthly fees and pending assessments eat your budget.
Taxes on Rental Income
If you rent the property out, Hawaii charges General Excise Tax on gross rental income at a 4% base rate, plus a 0.5% county surcharge in all four counties, for an effective 4.5%.5State of Hawaii Department of Taxation. An Introduction to Renting Residential Real Property6Hawaii Department of Taxation. County Surcharge on General Excise and Use Tax The GET applies to gross rent, not profit, so you owe it even when you’re losing money after expenses.
Short-term rentals (stays under 180 days) trigger an additional Transient Accommodations Tax, which rises to 11% effective January 1, 2026.7Hawaii Department of Taxation. Department of Taxation Announcement No. 2026-01 Counties may add their own transient accommodations surcharge on top of the state rate. Between GET, TAT, and county surcharges, short-term operators in Hawaii carry a combined tax load that meaningfully cuts revenue.
What You’ll Owe When You Sell
Selling as a non-resident triggers withholding at both the state and federal level. The money comes out at closing, before you file any return.
HARPTA (State Withholding)
The Hawaii Real Property Tax Act requires the buyer to withhold 7.25% of the sale price when purchasing from a non-resident seller and remit it to the state.8Justia. Hawaii Revised Statutes Title 14 Chapter 235 Section 235-68 – Withholding of Tax on the Disposition of Hawaii Real Property Hawaii presumes every seller is a non-resident unless proven otherwise. You avoid withholding by filing Form N-289 certifying Hawaii residency, or if the property was your principal residence and the sale price doesn’t exceed $300,000.9Hawaii.gov. Tax Facts 2010-1 Understanding HARPTA If your actual tax liability is lower than what was withheld, you claim the difference as a refund on your Hawaii return. If you expect no gain, you can apply for a reduced withholding certificate on Form N-288B at least 10 working days before the transfer.
FIRPTA (Federal Withholding)
Foreign sellers face an additional 15% federal withholding under the Foreign Investment in Real Property Tax Act, collected at closing and remitted to the IRS.10Internal Revenue Service. FIRPTA Withholding The withholding drops to zero if the buyer plans to use the property as a residence and the sale price doesn’t exceed $300,000, though that threshold is largely irrelevant in Hawaii where the statewide median single-family home price is around $575,000.11Internal Revenue Service. Exceptions From FIRPTA Withholding Combined with HARPTA, a foreign national selling could see 22.25% of the sale price withheld before receiving proceeds. FIRPTA withholding can be reduced or eliminated by obtaining a withholding certificate from the IRS before closing, but applying after escrow opens is often too late.
Short-Term Rental Restrictions
If your purchase plan depends on running a vacation rental, research county rules before you make an offer. Hawaii has no statewide permitting framework for short-term rentals; each county sets its own.
Honolulu (Oahu) illustrates how restrictive these can be. Short-term rentals, defined as lodging for fewer than 30 consecutive days, are only permitted in resort-zoned areas and a limited number of apartment-zoned areas. Properties outside those zones cannot legally operate as vacation rentals unless they hold a grandfathered nonconforming use certificate tied to operations dating back to before October 1986. Those certificates must be renewed annually between September 1 and October 15, and missing the deadline means losing the certificate permanently.12Department of Planning and Permitting. Short-Term Rentals
On Oahu, sellers must also provide a short-term rental disclosure form stating whether the property can legally be used for vacation rentals. Maui, Kauai, and Hawaii County each run their own permit systems with limited availability. Across all counties, operating an unpermitted short-term rental brings fines and enforcement. Verify zoning and permit status in writing before you commit.
Land Use and Zoning
Hawaii classifies all land statewide into four districts: urban, rural, agricultural, and conservation.1Justia. Hawaii Revised Statutes Title 13 Chapter 205 Section 205-2 – Districting and Classification of Lands This state-level classification sits on top of each county’s local zoning, creating a layered system that limits what you can do with a property more tightly than most mainland buyers expect.
Agricultural land trips up buyers most often. You can build a farm dwelling on agricultural land, but the property must be used for actual agricultural activity, meaning growing crops, raising livestock, or similar uses.13Justia. Hawaii Revised Statutes Title 13 Chapter 205 Section 205-4-5 – Permissible Uses Within the Agricultural Districts Buying a scenic agricultural parcel with plans to build a purely residential estate violates zoning law, regardless of what the seller implies. Conservation-district land is even more restricted, with development essentially prohibited to preserve natural resources.
Each county’s planning department handles permits and enforces its own zoning ordinances governing building heights, setbacks, density, and permitted uses within the state-level districts. Check both the state classification and the county zoning before assuming you can build or modify anything.
Lava Zones and Coastal Setbacks
Lava Zones on Hawaii Island
The Big Island is divided into nine lava-flow hazard zones. Zone 1 covers the summits and active rift zones of Kilauea and Mauna Loa where eruptions originate, and Zone 2 covers areas immediately adjacent and downslope.14U.S. Geological Survey. Frequently Asked Questions and Answers About Lava-Flow Hazards Property in Zones 1 and 2 is significantly cheaper for a reason: standard homeowners insurance is difficult or impossible to obtain privately.
The Hawaii Property Insurance Association, created by the state legislature in 1991, exists specifically to provide basic property coverage for homeowners unable to get insurance on the private market due to volcanic risk. HPIA policies currently cap dwelling coverage at $450,000 with deductibles ranging from $500 to $3,000.15Hawaii Property Insurance Association. Welcome/History of HPIA If your home costs more than $450,000 to rebuild, you absorb the excess risk yourself. The 2018 Kilauea eruption destroyed over 700 homes, so this isn’t theoretical.
Shoreline Setbacks
Coastal property carries a mandatory minimum 40-foot building setback from the certified shoreline, increased from 20 feet in 2020. Counties cannot grant variances below 40 feet for any new structure.16Hawaii.gov. Hawaii Coastal Zone Management Special Management Area Permitting and Shoreline Setbacks If you’re buying oceanfront with development plans, the certified shoreline location directly determines your buildable area.
Shoreline certifications must be conducted by a licensed land surveyor, filed with the Department of Land and Natural Resources, and are only valid for 12 months from the certification date.17Department of Land and Natural Resources. Chapter 13-222 Hawaii Administrative Rules – Shoreline Certifications Shorelines shift with erosion and sea-level rise, so the buildable area of a coastal lot can shrink between the time you buy and the time you apply for a building permit.
One Category You Can’t Buy: Hawaiian Home Lands
Some Hawaii land is set aside under the Hawaiian Homes Commission Act and administered by the Department of Hawaiian Home Lands. These homestead leases are not sold on the open market. To qualify, an applicant must be at least 18 and have at least 50% Native Hawaiian blood quantum.18Department of Hawaiian Home Lands. Applying for Hawaiian Home Lands Leases can only pass to qualified relatives under strict successorship rules.19Department of Hawaiian Home Lands. Lease Successorship If you come across a property described as being on Hawaiian Home Lands, it isn’t available through a standard real estate transaction.