Overview
Hawaii is the only US state located entirely in the tropics and outside of North America. Known for its stunning natural beauty, unique culture, and year-round warm weather, Hawaii offers a lifestyle unlike anywhere else in the nation. The islands attract both primary residents and second-home buyers seeking paradise.
Hawaii Real Estate Market
Hawaii consistently ranks among the most expensive housing markets in the nation due to limited land, high construction costs, and strong demand from both local buyers and mainland investors. Oahu's market is the largest, while neighbor islands like Maui and the Big Island offer slightly lower prices but fewer job opportunities. The state's isolation creates unique market dynamics.
Property Taxes in Hawaii
Hawaii has the lowest effective property tax rate in the nation, though high home values mean significant tax bills.
Average effective rate: 0.28%
Annual tax on median home: ~$2,506
Homeowner exemption: $100,000+ reduction in assessed value for primary residence
First-Time Buyer Programs
HHFDC Programs: Hawaii Housing Finance and Development Corporation offers:
- Mortgage Credit Certificate - Tax credit up to $2,000 annually
- Down Payment Loan Program - Second mortgage for down payment
- Hula Mae - Below-market rate mortgages for eligible buyers
Closing Costs in Hawaii
Hawaii closing costs typically range from 2-4% of the purchase price.
Common costs include:
- Conveyance tax: 0.1-1% based on sale price
- Title insurance: ~0.25% of purchase price
- Escrow fees: $500-$2,000
- Recording fees: Based on document type
Frequently Asked Questions
Yes, there are no residency requirements to purchase property in Hawaii. However, some areas have leasehold land (especially on Hawaiian Home Lands), and foreign buyers may face additional tax implications.
Limited land supply, high construction costs, geographic isolation, strong demand from mainland buyers and international investors, and the desirable tropical lifestyle all contribute to Hawaii's high prices.
Leasehold means you own the building but lease the land, typically for 55 years. Fee simple means you own both. Leasehold properties are cheaper but have expiration dates and may have restrictions.