Hawaii Real Estate – MLS Search
Tax credits
Where is my State Tax Refund?
Jan 22nd
Find Your State Tax Refund Status
You can track your state tax refund by clicking the appropriate link on the chart below.
state taxes refunds hawaii
International Real Estate Investment Poised to Double
Jan 2nd
Hawaii Real Estate Investments and Property Attractive to Chinese and Koreans
Investments from foreign sources into the U.S., particularly real estate investments, have continued to increase over the last several decades. The total U.S. Existing Home Sales market was approximately $1.07 trillion in the 12 months ending in March 2011 based on a recent NAR survey. Foreign clients purchased an approximate $41 billion share of homes, the same as the previous year. In addition, recent immigrants (who have moved to the U.S. within the past 2 years) and individuals with visas for more than 6 months purchased an additional $41 billion, for total internationally oriented sales of $82 billion, up from $66 billion reported in 2010.
Geographic Market Segmentation: International buyers came from a total of 70 countries; the top five (Canada, Mexico, China, U.K., and India) accounted for 53 percent of transactions. Most states had at least one international transaction, but four states—Arizona, California, Florida, and Texas—accounted for 58 percent of transactions.
According to the NAR report, almost 80 percent of Realtors® reported that the value of the dollar had an impact on international sales. U.S. home prices have declined in recent years in both dollars and euros. When the euro’s value relative to the dollar increases the real price of a U.S. home to a euro based purchaser declines. During the past 10 years the strength of the euro has in general increased the purchasing power of international buyers. Declining U.S. home prices have also increased the attractiveness of the U.S. market. Due to the arbitrage nature of international currency markets, when the dollar depreciates against the euro it also tends to depreciate against other currencies, so overall the U.S. home buying market has become increasingly attractive to international purchasers.
Net Foreign Investment China-Korea-Canada-Australia-Brazil-India
The commercial property market in the U.S. is currently beset by both excess inventory and reluctance on the part of lenders to increase their current exposure to the market by lending further. Thus there is very little demand on the part of investors, domestic or foreign, to acquire commercial properties or begin new projects. The commercial market should improve as broader fundamentals in the economy improve; most notably employment and consumer spending, which should bolster property cash flows and improve capitalization rates, which in turn will help to stabilize commercial investment.
For the twelve months ending April 2010, foreign purchases of U.S. residences totaled $64 billion. This is almost twice the $36 billion in foreign transactions that took place during the twelve months ending April 2009. The percent of dollar volume represented by foreign transactions increased from 4.3% in 2009 to 7.1% in 2010.
Most of the foreign purchases in U.S. residential real estate were located in four states – Arizona, California, Florida and Texas.
Home Price Indices Arizona, California, Florida and Texas
These four states accounted for 54% of all international transactions in the twelve months ending April 2010. This compares to only 38% of all foreign transactions in the twelve months ending April 2007. Not surprisingly, states with a large number of distressed properties in vacation areas such as Florida and Arizona exhibited the biggest increases in foreign purchases. Foreign purchases in Florida and Arizona increased from 10% to 22% and 5% to 11% of all foreign transactions in the U.S. respectively between 2007 and 2010.
Foreign investment should improve as fundamentals in the commercial market stabilize. Attractive prices and a relatively weak dollar should entice foreign investors to return to U.S. commercial real estate. In regards to the residential market, low interest rates, a weak dollar, and attractive prices in traditional vacation areas should continue to attract foreign investment commensurate with recent levels.
EB-5 Visas
In 2010, nearly 2,000 would-be immigrants, many from China, applied for EB-5 visas, the most ever in a single year, according to U.S. Citizenship and Immigration Services (USCIS), the agency that oversees the program. The surge has been driven in part by a 20-fold increase in the number of U.S. companies looking to participate.
Direct Individual Investment Tax Implications
Advantages
Preferential long-term capital gain on a flat basis for capital assets held for more than 1 year
Lower acquisition cost
Easier to obtain institutional financing
Disadvantages
10% FIRPTA Withholding and 5% HARPTA Withholding at the time of sale. The N-288 forms are located here and here.
30% withholding tax on rental income unless an election is made to treat the rental income as effectively connected with U.S. trade or business income
Income Tax Implications
Rental income/expenses
Withholding Tax – 30% on payment made to a foreign person
Exception – Claim that income is effectively connected with a US trade or business
Form W-7 – Individual Identification Number
Form W-8ECI – Claim of income effectively connected with a US trade or business
Form 1042-S – Foreign person’s US source income subject to withholding tax
US tax treaties
Federal Income Tax – Graduate income tax rates
Hawaii Income Tax Graduate income tax rates
General Excise Tax – 4%
Transient Accommodations Tax – 9.25%
Honolulu City and County Surcharge Tax – 0.5%
State of Hawaii Tax Forms
Income Taxes
- Individual Income Tax – Resident and Nonresident
- Partnership Income Tax
- Corporate Income Tax
- S Corporation Income Tax
- Employer’s Withholding of State Income Tax
- Exempt Organization Business Income Tax
- Fiduciary (Trust and Estate) Income Tax
- REMIC – Real Estate Mortgage Investment Conduits Income Tax
General Excise, Use, Transient Accommodations, Rental Motor Vehicle Surcharge Taxes
- General Excise and Use Tax
- Transient Accommodations Tax
- Rental Motor Vehicle and Tour Vehicle Surcharge Tax
Other Taxes
House Extends Deadline to Sept. for Homebuyer Tax Credit
Jun 30th
House Approves Homebuyer Tax Credit Extension
Today the House voted 409-5 to extend the deadline for closing home purchases to Sept. 30. The program initially required borrowers who signed contracts before April 30 to complete paperwork by July 1 to get a tax credit of as much as $8,000.
The House measure accommodates borrowers at risk of being disqualified for the tax credit because lenders and loan servicers aren’t processing mortgages quickly enough. The Senate is considering similar legislation.
NAR (National Association of Realtors,) estimates the number of homebuyers who have qualified for the tax credit and met the contract deadline of April 30, but who would not be able to close their transaction by the June 30 deadline, could go as high as 180,000. REALTORS® have reported as many as one-third of qualified applicants have been notified by lenders that their mortgages will not close before June 30 due to the sheer volume of applications in the pipeline.
The Mortgage Bankers Association reported that average contract interest rate for 30-year fixed-rate mortgages decreased to 4.67 percent from 4.75 percent, with points decreasing to 0.96 from 1.07 (including the origination fee) for 80 percent loan-to-value (LTV) ratio loans. This is the lowest 30-year contract rate recorded in the survey since the week ending April 24, 2009. The effective rate also decreased from last week.
First-Time Homebuyer Credit: Military and Certain Other Federal Employees
May 1st
Hawaii First Time Homebuyer Credit for Military Extended to 2011
There are new benefits for members of the military and certain other federal employees:
- Members of the military and certain other federal employees serving outside the U.S. have an extra year to buy a principal residence in the U.S. and qualify for the credit. Thus, an eligible taxpayer must buy, or enter into a binding contract to buy, a principal residence on or before April 30, 2011. If a binding contract is entered into by that date, the taxpayer has until June 30, 2011, to close on the purchase. Members of the uniformed services, members of the Foreign Service and employees of the intelligence community are eligible for this special rule. It applies to any individual (and, if married, the individual’s spouse) who serves on qualified official extended duty service outside of the United States for at least 90 days during the period beginning after Dec. 31, 2008, and ending before May 1, 2010.
- In many cases, the credit repayment (recapture) requirement is waived for members of the uniformed services, members of the Foreign Service and employees of the intelligence community. This relief applies where a home is sold or stops being the taxpayer’s principal residence after Dec. 31, 2008, in connection with government orders received by the individual (or the individual’s spouse) for qualified official extended duty service. The credit is still allowable even if this happens during the year of purchase. Qualified official extended duty is any period of extended duty while serving at a place of duty at least 50 miles away from the taxpayer’s principal residence (whether inside or outside the U.S.) or while residing under government orders in government quarters. Extended duty is defined as any period of duty pursuant to a call or order to such duty for a period in excess of 90 days or for an indefinite period.
Question and Answer
Q. Are both spouses required to be overseas for the requisite time period in order to qualify for the 2011 extension to claim the credit?
A. Only one spouse must be overseas on official extended duty for the requisite amount of time for either spouse to be eligible for the 2011 extension of time to purchase a principal residence and claim the credit.
3 Steps for Hawaii First Time Home Buyers
Apr 8th
How to Get the First-Time Home Buyer Tax Credit
Buying your first home is a significant, long-term investment representing many important aspects of our lives, as well as providing financial and emotional security. It is also the largest single transaction most people ever make. That’s why it’s so important to choose a home and a mortgage that are well suited to your needs. You need a top-notch agent there to guide you. Once you’ve decided to buy your first home, pursue it and make your dreams possible.
You’ve decided to purchase a home and take advantage of the Extended Home Buyer Tax Credit. Here’s what you have to do to get your benefit:
- Close on your home purchase between November 7, 2009 and April 30, 2010, or have a binding written contract in place by April 30, 2010 with a closing date no later than June 30, 2010.
- Decide whether to:
- apply the credit to your 2009 tax return, filed on or before April 15, 2010;
- file an amended 2009 return; or,
- apply the credit on your 2010 return, filed on or before April 15, 2011.
- Attach documentation of purchase to your return.
Pending home sales rose in February 2010, potentially signaling a second surge of home sales in response to the home buyer tax credit, according to the National Association of Realtors.
For the first time, long-time homeowners who buy a replacement principal residence may also claim a homebuyer credit of up to $6,500 (up to $3,250 for a married individual filing separately). They must have lived in the same principal residence for any five-consecutive year period during the eight-year period that ended on the date the replacement home is purchased.
New legislation, the Worker, Homeownership and Business Assistance Act of 2009, which was signed into law on Nov. 6, 2009, extends and expands the first-time homebuyer credit allowed by previous Acts. The new law:
- Extends deadlines for purchasing and closing on a home.
- Authorizes the credit for long-time homeowners buying a replacement principal residence.
- Raises the income limitations for homeowners claiming the credit.
Under the new law, an eligible taxpayer must buy, or enter into a binding contract to buy, a principal residence on or before April 30, 2010 and close on the home by June 30, 2010. For qualifying purchases in 2010, taxpayers have the option of claiming the credit on either their 2009 or 2010 return.
People with higher incomes can now qualify for the credit. The new law raises the income limits for homes purchased after Nov. 6, 2009. The credit phases out for individual taxpayers with modified adjusted gross income (MAGI) between $125,000 and $145,000 or between $225,000 and $245,000 for joint filers. The existing MAGI phase-outs of $75,000 to $95,000 or $150,000 to $170,000 for joint filers still apply to purchases on or before Nov. 6, 2009.
General Information
Homebuyers who purchased a home in 2008 or 2009 may be able to take advantage of the first-time homebuyer credit. The credit:
- Applies only to homes used as a taxpayer’s principal residence.
-
Reduces a taxpayer’s tax bill or increases his or her refund, dollar for dollar.
-
Is fully refundable, meaning the credit will be paid out to eligible taxpayers, even if they owe no tax or the credit is more than the tax owed.
The credit is claimed using Form 5405, which you file with your original or amended tax return.
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