Quick Answer
If I live outside the US, how much is withheld when I sell my Oahu home?
Both withholdings apply to the same sale. Federal FIRPTA takes 15% of the amount realized and Hawaii HARPTA takes 7.25% of the gross sales price, so 22.25% of your price is held at closing. On a $1,200,000 Kailua sale that is $267,000. Neither one is your tax bill. Both are prepayments you file to reduce beforehand or recover afterward.
By Aksana Tupalskaya | October 8, 2026
Most owners selling an Oahu property from abroad have heard of one of these two withholdings. Almost nobody arrives knowing about both. The discovery usually happens about two weeks before closing, when escrow sends the figures, and by then the cheapest options have already expired.
Two separate withholdings, one closing
HARPTA is the Hawaii Real Property Tax Act. When the seller is not a Hawaii resident, the buyer must withhold 7.25% of the gross sales price and send it to the Hawaii Department of Taxation. I walk through the state side in detail in my post on HARPTA withholding for out-of-state Oahu sellers.
FIRPTA is the Foreign Investment in Real Property Tax Act. It is federal, it is older, and it triggers on a different question: whether you are a foreign person for US tax purposes. The standard rate is 15% of the amount realized.
Those are not alternatives. A seller who lives in Vancouver, Tokyo, or Sydney and owns a home on Oahu is typically a non-resident of Hawaii and a foreign person for federal purposes. Both statutes look at the same closing and both take their cut.
| Sale price | FIRPTA withheld (15%) | HARPTA withheld (7.25%) | Total held at closing |
|---|---|---|---|
| $850,000 Hawaii Kai condo | $127,500 | $61,625 | $189,125 |
| $1,200,000 Kailua home | $180,000 | $87,000 | $267,000 |
| $2,000,000 East Honolulu property | $300,000 | $145,000 | $445,000 |
What this tells me as the numbers agent for Oahu sellers: a foreign seller has 22.25% of the sale price sitting with two different tax authorities before a single dollar reaches them, and that figure is driven entirely by price, not by whether the sale made any money at all.
Both are prepayments, not the tax
This is the part worth holding onto. Neither withholding is what you owe. Both are deposits against a tax return you have not filed yet, and both are calculated from the sale price rather than from your gain.
That distinction matters most on inherited property and on homes held for decades. An heir who received an Oahu home with a stepped-up basis may have a very small real gain, yet the formula still withholds on the full price. The money is recoverable. It just sits with the government for months while you recover it.
There is a cheaper path, and it runs before closing rather than after. On the Hawaii side, Form N-288B asks the state to withhold your expected actual tax instead of the flat 7.25%, and it has to be filed at least ten working days ahead of the transaction. On the federal side, Form 8288-B asks the IRS for the same treatment. My post comparing N-289 and N-288B covers which Hawaii form fits which situation.
What this changes about your timeline
A domestic mainland seller can decide to sell and list within a week. A foreign seller usually cannot, and the constraint is paperwork rather than the property.
If you do not already hold a US taxpayer identification number, that application belongs at the front of the process, not the middle. Withholding certificate applications need it. So does the return you will eventually file to recover the money.
I also tell overseas owners to settle one question early: who signs. If you cannot be in Hawaii at closing, the signing method needs to be arranged with escrow and title well before the closing date, not in the final week.
None of this is a reason to avoid selling. It is a reason to start the conversation a few months earlier than a mainland owner would. The withholding is survivable. Discovering it late is what costs real money, because the forms that reduce it all have deadlines that sit before closing.
One honest caveat. FIRPTA and HARPTA are tax matters and your situation turns on facts I cannot see from here, including your residency history, your basis, and any treaty position. Everything above is the shape of the problem, not advice on your return. Work the specifics with a CPA who handles non-resident Hawaii sales.
Frequently Asked Questions
Does FIRPTA replace HARPTA, or do I really pay both?
They are separate systems and both apply. FIRPTA is federal and triggers on your status as a foreign person. HARPTA is a Hawaii statute and triggers on your status as a non-resident of Hawaii. A foreign seller of Oahu property is usually both at once, so the two stack on the same closing.
Is there any sale price where FIRPTA does not apply?
Yes, and it depends on the buyer’s plans as much as yours. If the amount realized is $300,000 or less and the buyer is acquiring it as their own residence, FIRPTA withholding can be zero. Between $300,001 and $1,000,000 with that same buyer-residence condition, the rate drops to 10%. Above $1,000,000 it is 15% regardless. HARPTA is unaffected by any of this and still applies.
Can I reduce the withholding instead of waiting for a refund?
On both sides, yes, and both have deadlines before closing. For HARPTA you file Form N-288B at least ten working days before the transaction. For FIRPTA you apply to the IRS for a withholding certificate on Form 8288-B. Each one is judged on your expected actual tax, which for many long-held or inherited Oahu properties is far below the gross-price formula.
Do I need a US tax identification number?
You generally do, and this is the step that quietly delays the most sales. FIRPTA paperwork needs a taxpayer identification number for the foreign seller, and applying for an ITIN is not a same-week process. If you are thinking about selling in the next year, starting that application early costs you nothing and removes a real bottleneck.
Where to start
If you are selling an Oahu home from outside the country, the two things that save you the most are starting early and knowing your actual expected tax before closing rather than after.
I work with out-of-state and overseas owners regularly, and the first conversation is usually about sequencing rather than price. If you want to walk through your own timeline, book a free 20-minute remote strategy call with me here and we will map out what has to happen, and in what order, before you list.
