Taxes on Selling a House Hawaii
Selling a home in Hawaii can be an exciting step toward your next chapter, but it is important to understand the tax implications before you close the deal. If you are researching taxes on selling a house Hawaii, you are probably wondering how much you might owe and whether there are ways to reduce that amount. Having this knowledge in advance can help you avoid surprises and keep more money in your pocket.
At Trusty House Buyers, we specialize in buying homes in as-is condition, including properties damaged by fire, flood, storms, or neglect. That means:
No repairs
No cleaning
No inspections
No waiting
Whether you are selling a home you have lived in for years, an inherited property, or a rental, understanding taxes on selling a house Hawaii will help you make smarter financial decisions. We work with sellers who want a quick, hassle-free sale without dealing with expensive renovations or complicated closing processes.
Why Work with Trusty House Buyers
If you are ready to sell and want to avoid the stress of repairs, showings, and long waits, we can help. Here is why homeowners choose us:
We buy homes in any condition — including damaged, outdated, or inherited properties.
We pay cash — no financing delays.
We close on your schedule — sometimes in as little as 7 days.
We cover all closing costs — no hidden fees.
We offer a transparent, hassle-free process.
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Understanding Capital Gains Tax in Hawaii
One of the main taxes on selling a house Hawaii is capital gains tax. This is a tax on the profit you make from selling your property. The gain is calculated by subtracting your purchase price and any qualifying expenses (like major improvements or selling costs) from your selling price.
Capital gains taxes in Hawaii include:
Federal capital gains tax — Rates vary depending on your income and how long you owned the property.
Hawaii state capital gains tax — The state rate is currently 7.25%.
If you owned the property for more than a year, your profit is taxed at the long-term capital gains rate, which is typically lower than the short-term rate.
The Home Sale Exclusion
The IRS offers an exclusion that can help reduce or even eliminate taxes on selling a house Hawaii if the property is your primary residence. Under this rule:
Single filers can exclude up to $250,000 of profit from taxes.
Married couples filing jointly can exclude up to $500,000.
To qualify, you must have owned the home for at least two years and lived in it as your primary residence for at least two of the last five years before the sale.
Taxes for Non-Residents
If you live outside Hawaii but own property in the state, you may also be subject to the Hawaii Real Property Tax Act (HARPTA). HARPTA requires buyers to withhold 7.25% of the sale price for potential state taxes. There is also a federal version called FIRPTA for foreign sellers.
These withholdings are not the actual tax owed but are applied toward your tax bill when you file. Understanding HARPTA and FIRPTA rules is crucial for non-resident sellers.
Hear From Other Homeowners
Shan K.
"Awesome experience!"
"Awesome experience! First time selling a property and the home selling process was quick and smooth. The team is very caring and accommodating. I would definitely recommend them to anyone!"
Billy Becker
"Would recommend to all!"
"I had a great experience working with this group. They answered every question and left me feeling totally satisfied with the transaction. Would recommend to all!"
Brandon Doctor
"Paid more than other cash buyers"
"I have done several deals with this company and they have always treated people fairly and paid more than other cash buyers I’ve talked to."
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How to Reduce Taxes on Selling a House Hawaii
There are several strategies to reduce or manage your tax liability:
Track all improvement costs — Major repairs and upgrades can increase your cost basis and lower your taxable gain.
Sell during a low-income year — This may qualify you for a lower capital gains rate.
Use the primary residence exclusion — If you qualify, this can significantly reduce your taxes.
Consider a 1031 exchange — For investment properties, this allows you to defer taxes by reinvesting in another property.
Work with a tax professional — They can help you identify deductions and credits you may overlook.
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Selling an Inherited Property
If you inherited a home, your taxes on selling a house Hawaii may be lower than you think. The IRS uses a "stepped-up basis," which means the home’s value is set at the market value on the date you inherited it, not the original purchase price. This can greatly reduce your taxable gain if you sell soon after inheriting.
How As-Is Sales Affect Taxes
Selling as-is to a cash buyer like Trusty House Buyers can simplify the process, but it does not eliminate tax obligations. However, if you need to sell quickly to avoid ongoing expenses like mortgage payments, property taxes, or costly repairs, the speed of an as-is sale can help preserve your profits.
We buy properties in any condition, which means you can avoid spending money on improvements that may not significantly raise your selling price — and therefore may not meaningfully reduce your taxable gain.