HARPTA: What Aulani Sellers Need to Know

Selling an Aulani DVC contract as a non-US owner means dealing with two withholding taxes at once: the federal 15% FIRPTA and Hawaii's state-level 7.25% HARPTA. Combined, 22.25% of your sale price is held back at closing.

What Is HARPTA?

HARPTA stands for Hawaii Real Property Tax Act. Unlike FIRPTA, which applies only to foreign sellers, HARPTA applies to anyone who is not a Hawaii resident. A US citizen living in Texas selling their Aulani contract faces the 7.25% HARPTA withholding just like a seller from the UK or Australia would.

Two Withholdings, Two Refunds

On a $25,000 Aulani sale, you would have $3,750 in federal FIRPTA and $1,812.50 in Hawaii HARPTA withheld at closing. Your actual federal tax on a $7,000 gain is around $1,050. Your actual Hawaii tax on that same gain is typically $350 to $550. So your combined refunds could be $4,000 or more.

To get the federal refund, file Form 1040-NR after December 31. To get the Hawaii refund, file either Form N-15 (standard Hawaii non-resident return) or Form N-288C (a faster tentative refund application you can file shortly after closing without waiting for year end).

Form N-288B: Reduce HARPTA Before Closing

Hawaii offers Form N-288B, similar to the federal Form 8288-B, to apply for a reduced withholding certificate before closing. Processing can take several weeks to months. If your closing timeline is flexible, filing N-288B early can reduce the amount withheld upfront.

For the complete breakdown of FIRPTA and HARPTA for Aulani sellers, see our full Aulani guide.