Selling land with back taxes in Hawaii

How Hawaii handles unpaid property taxes

Hawaii sells the land at a tax sale, but the deed can be redeemed for a set period afterward. You can win the land back during that window by paying the taxes, costs and a premium.

The redemption rule in Hawaii: Each county auctions land for unpaid property tax, generally once the tax lien is 3 years old (2 years in Hawaii County). The owner may redeem within 1 year of the sale by repaying the buyer's price, costs and 12% yearly interest. In Honolulu and Maui, the year runs from deed recording if the deed is recorded more than 60 days after the sale. Money left after taxes and liens goes to the owner. Hawaii County requires a claim within 2 years of the sale, and Kauai within 1 year.

Law: Honolulu ROH 8-5.2, 8-5.6. Hawaii County Code 19-38, 19-42, 19-45. Maui County Code 3.48.250, 3.48.270. Kauai County Code 5A-5.2, 5A-5.6, 5A-5.9. Rules change, so confirm with the county tax collector.

What to do before the tax sale

• Call the county tax office and get the exact amount owed and the next sale date.
• Decide whether you want to keep the land. If not, selling before the sale stops the interest and penalties from growing.
• Gather the parcel number and any tax bills. A buyer and the title company need them to order a payoff.

Hawaii land at a glance

• Average property tax on farmland: about $22.52 per acre per year (2022 Census of Agriculture).
• Transfer tax: Conveyance tax is one rate on the whole price, $0.10 per $100 for property under $600,000. The rate is $0.20 from $600,000 to $1 million, $0.30 to $2 million and $0.50 to $4 million. It is $0.70 to $6 million, $0.90 to $10 million and $1.00 above. The minimum tax is $1. A higher schedule applies only to a condo or single-family home sold to a buyer not eligible for a county homeowner exemption.
• Seller disclosure: The Hawaii seller disclosure statute covers only residential real property (1 to 4 dwelling units or a residential condo/co-op), so vacant land is outside it. Common-law duty to disclose known material facts still applies.

These are statewide averages, not an appraisal. See selling land in Hawaii for county values, or try the land value estimator.

How a cash sale handles this

Liberty Acres is a family-owned cash land buyer. We buy land anywhere in the US, in any condition, including land with back taxes, inherited land and land with no road access. We pay back taxes and all closing costs, use no agents and charge no commissions, and close through a title company, escrow company or real estate attorney who pays you by wire or check.

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