What is the HARPTA tax rate applied in Hawaii?

The HARPTA tax rate, which stands for the Hawaii Real Property Tax Act, is a tax applied to non-resident sellers of Hawaii real estate. The correct rate under HARPTA is indeed 7.25%. This tax is withheld at the time of the sale to ensure that taxes owed on the capital gains from the sale of property are collected. It applies to transactions where the seller is not a resident of Hawaii and is designed to capture tax revenue from those who might not otherwise pay state income tax. Understanding this tax rate is crucial for both sellers and real estate professionals in Hawaii, as it impacts financial planning and transaction procedures.