HARPTA Options for Military Sellers

For military members selling a home who have not declared Hawaii as their state of residency, it's important to note that, for the purposes of HARPTA, you are not considered to be Hawaii residents. 

 

The Hawaii definition of a "resident" includes the following passage:

"No person shall be deemed to have gained or lost a residence simply

because of the person’s presence or absence in compliance with military

or naval orders of the United States, or while engaged in aviation or navigation,..."  (Link for reference)

So if you're an active service member in the military who is selling your home in Hawaii, whether you're leaving because you are being transferred or discharged, you're not automatically eligible to receive a HARPTA waiver. 

 

However, there are a number of ways that you may be able to sell your home without being subject to HARPTA withholding.  

How Military Can Be Exempted from HARPTA

 

First, if you have used the home as your main home as your principal residence for the last year, and the sales price is $300,000 or less, you may certify this on Form N-289 (provided by escrow) by checking the appropriate box, and there is no HARPTA withholding.  Easy!

If the preceding rule does not apply to you, you may be able to apply for a HARPTA waiver by using the provisions of a federal tax rule referred to as "Section 121 Gain Exclusion". 

 

We have helped many military service members avoid HARPTA withholding based on this rule. 

 

Contact us today to learn how we can help you too!

Contact Us