We received notice from Fidelity National Title & Escrow of Hawaii of the following changes to the Foreign Investment in Real Property Tax Act. We have copied the notice in its entirety for your review:
“EFFECTIVE FOR CLOSINGS DATES ON OR AFTER FEBRUARY 16, 2016
On December 18, 2015, President Obama signed into law the “Protecting Americans from Tax Hikes Act of 2015” (the “Act”), which makes significant changes to the Foreign Investment in Real Property Tax Act of 1980 (“FIRPTA”). The Act increases the FIRPTA withholding rate from 10% to 15% under certain circumstances.
Sales Price over $1,000,000:
If the sales price is over $1,000,000, then 15% FIRPTA withholding applies.
Sales Price over $300,000 up to $1,000,000:
If the sales price is over $300,000 and does not exceed $1,000,000, and the buyer will be using the property as his or her residence, then 10% FIRPTA withholding applies.
If the sales price is over $300,000 and does not exceed $1,000,000, and the buyer will NOT be using the property as his or her residence, then 15% FIRPTA withholding applies.
Sales Price $300,000 or less:
If the sales price is $300,000 or less, and the buyer will be using the property as his or her residence, then FIRPTA withholding does NOT apply (0% Withholding).
If the sales price is $300,000 or less, and the buyer will NOT be using the property as his or her residence, then 15% FIRPTA withholding applies.”
We hope you find this information beneficial.
Syed Sarmad, Principal Broker for Advantage Vacation
