Help! I’m digging into a story, and need to talk to someone who is familiar with Hawaii’s real property conveyance tax.
I’m specifically trying to understand several transactions in which the conveyance tax was either zero, $1.50, or $1,000. These involved a property that was likely worth in the neighborhood of $3 million. The law provides for exemptions from the conveyance tax, and I’m trying to understand what exemptions would have applied to these particular transactions, or ones like them.
Do you know anyone who might be able to help me? Perhaps a real estate attorney or experienced realtor would know about these situations.
Please contact me via Messenger with any suggestions of people I might be able to consult, or email, ian@ilind.net.
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I can go back and do the research again, but it is on the web. You might be confused because the conveyance tax is like a progressive wealth tax. The rate is determined by the actual price the property is sold at. The higher the value at the time of sale the higher the rate. I don’n’t recall exactly. If its the buyer or the seller thaat pays but I think its the seller. n the examples you cited you suggested the value “is in the range of” suggesting, maybe, that it is the current value, rather than the value at the time of sale. The range of the taxes paid are consistent with.the rates. The range for each rate as I recall was x to x99. Meaning reducing the price by as little as 1$ would give you a different rate. One real estate web site even suggested a deal whereby the sales value could be dropped and some fee arranged. Up untill the $1 million dollar price was instituted the property tax rate was 35 cents per $100 valuation, the lowest am ong the top 50 municipalities. That introduced a bit of progressivity into our propert taxes
Will your investigation look into ways people avoid that tax?
I’m thinking of stories I read about how Larry Ellison avoided the tax when he bought much of Lana’i, by buying the company that owned the real estate.
I’m wondering how common that is, or what other strategies have been used to avoid the conveyance tax.