Selling Aulani? Understanding Both FIRPTA and HARPTA Requirements

If you own a DVC contract at Disney's Aulani resort in Hawaii and you're not a US resident, selling that contract hits you with two separate withholding taxes. FIRPTA takes 15% for the federal government. HARPTA takes 7.25% for the state of Hawaii. Combined, that's 22.25% of your sale price withheld at closing.

On a $25,000 Aulani sale, that's $5,562.50 held back before you see a dollar. It sounds brutal, and it stings at closing. But both withholdings work the same way: they're deposits against your actual tax, and most sellers get a significant portion back through refunds.

Why Aulani Gets Hit Twice

FIRPTA applies to any sale of US real property by a foreign person. Since Hawaii is part of the US, Aulani contracts are US real property, and FIRPTA applies just like it would for a sale at any Walt Disney World resort.

HARPTA is Hawaii's own withholding tax on real property sales. Here's the thing about HARPTA that surprises people: it applies to ALL sellers, not just foreign ones. Even US residents selling Aulani get hit with the 7.25% HARPTA withholding (unless they qualify for a Hawaii resident exemption). HARPTA exists because Hawaii wants to collect state tax on real property gains, and withholding at closing is their way of making sure they get it.

So if you're a non-US seller of Aulani DVC, you face both. A Canadian selling their 200-point Aulani contract for $30,000 has $4,500 withheld for FIRPTA and $2,175 withheld for HARPTA. That's $6,675 total withheld before commissions and closing costs.

Getting Your Federal Refund (FIRPTA)

The federal refund process works the same as any other DVC sale. File Form 1040-NR after the tax year ends, report the sale, calculate your actual gain and tax, and claim credit for the FIRPTA withholding. If the withholding exceeds your actual tax (it almost always does), you get a refund.

Typical timeline: 4-6 months after filing the 1040-NR.

Getting Your Hawaii Refund (HARPTA)

The Hawaii refund requires a separate state tax filing. You need to file a Hawaii income tax return (Form N-15 for non-residents) reporting the sale. You'll claim credit for the HARPTA withholding and request a refund of any excess.

You can also file Form N-288C (Application for Tentative Refund) shortly after closing to speed up the Hawaii refund. The N-288C is specifically designed for HARPTA withholding refunds and is processed faster than a regular Hawaii tax return. Hawaii typically processes N-288C refunds in 3-6 months.

For non-US sellers, you may also need a Hawaii Tax ID number (not the same as your federal ITIN). Check with the Hawaii Department of Taxation for current requirements.

Planning Your Aulani Sale

If you're thinking about selling your Aulani contract, here is what to plan for:

• Budget for the withholding. 22.25% of your sale price will be held back at closing. On a $25,000 sale, you'll receive roughly $19,440 minus broker commission and closing costs. Plan accordingly.
• Keep your purchase records. You'll need your original purchase price and closing costs for both your federal and Hawaii tax returns. These determine your gain and your refund amount.
• Get your ITIN. If you don't already have a US tax ID number, you'll need one. Apply with Form W-7 when you file your 1040-NR.
• Hire a professional. An Aulani sale with both FIRPTA and HARPTA is more complex than a regular DVC sale. A tax professional who handles both federal non-resident returns and Hawaii state returns will save you time and likely get you a larger refund.
• Consider timing. If you sell early in the calendar year, you'll file your tax returns sooner and get your refunds faster. A sale that closes in February lets you file your 1040-NR and N-15 by April of the same year, potentially receiving refunds by September or October.

The Bottom Line on Aulani Sales

Selling Aulani as a non-US owner involves more paperwork and more withholding than selling a Walt Disney World DVC contract. But the refund opportunity is also larger. With proper filing, most sellers recover $3,000-$5,000 or more from the combined FIRPTA and HARPTA withholdings.

Don't skip the filings. Don't leave the money at the IRS and Hawaii tax office. The paperwork is worth it.