Yes, non-residents — including U.S. mainland buyers and international investors — can legally purchase property in Hawaii. There are no citizenship or residency requirements to own real estate in the state. This includes single-family homes, condos, and vacant land.

That said, there are a few important considerations to keep in mind:

• Financing Challenges: Some mainland or foreign buyers may face additional hurdles when securing a mortgage. Not all lenders offer loans to non-residents, so it’s often easier to pay cash or work with a Hawaii-based lender familiar with local rules and regulations for international buyers.
• Tax Implications: Non-residents who sell property in Hawaii may be subject to withholding taxes such as HARPTA (Hawaii Real Property Tax Act) for out-of-state U.S. owners and FIRPTA (Foreign Investment in Real Property Tax Act) for international sellers. These are not additional taxes but prepayments toward potential capital gains tax liability.
• Short-Term Rental Restrictions: If your intention is to rent out the property as a vacation rental, you’ll need to understand local county rules. Many areas in Hawaii, especially on the Big Island, have strict zoning and permitting laws that govern short-term vacation rentals (STVRs).
• Ownership Structure: Some international buyers choose to purchase through an LLC or trust for liability, estate planning, or tax purposes. Consulting with a local real estate attorney or CPA is highly recommended.

Helpful Resources:

• HARPTA Explained
• FIRPTA Overview
• Hawaii County STVR Regulations
• Big Island Home Buying Guide by Penn Henderson

In Hawaii, real estate is sold under two primary types of ownership: fee simple and leasehold. Understanding the distinction is critical when evaluating property.

Fee Simple

• Fee simple is the most complete form of ownership.
• Buyers own both the land and any structures on it outright.
• Ownership is perpetual and can be sold, inherited, or transferred at any time.
• The majority of single-family homes and newer condominiums in Hawaii are held in fee simple ownership.

This form of ownership offers long-term security, enhanced financing options, and a stronger resale value.

Leasehold

• With leasehold, buyers own the physical property (such as a condo unit), but not the underlying land.
• The land is leased from a separate landowner (lessor) for a specified period, typically ranging from 30 to 99 years.
• At the end of the lease term, ownership of the land and improvements may revert to the landowner unless the lease is renegotiated or extended.
• Leasehold properties often have lower purchase prices, but also come with additional costs, including monthly lease rent.

Buyers must evaluate remaining lease duration, lease rent terms, and the likelihood of lease renewal or fee conversion. Financing can also be more difficult, as many lenders require a lease term that extends well beyond the life of the loan.

When is leasehold worth considering?

Leasehold properties may be suitable for buyers seeking a more affordable second home or short-term use property, particularly in areas like Waikiki or parts of the Big Island where older leasehold condos exist. However, it is essential to conduct due diligence on lease expiration, lease rent escalations, and overall financial implications.

Helpful Resources:

• Hawaii DCCA: Leasehold Property Ownership Booklet (PDF)
• Browse Fee Simple vs Leasehold Listings for Sale

*Consult with a Hawaii real estate attorney or trusted REALTOR® for personalized guidance.

While it’s not mandatory to use a local lender when buying property in Hawaii, working with a Hawaii-based lender is often highly recommended, especially for a smoother and more efficient transaction.

Here’s why:

Advantages of Using a Local Hawaii Lender:

• Familiarity with Island-Specific Nuances: Hawaii’s real estate process includes unique features—such as lava zone classifications, leasehold property structures, and condominium hotel (condotel) lending—that many mainland lenders are unfamiliar with.
• Faster Appraisal Coordination: Local lenders often have established relationships with Hawaii appraisers, helping reduce delays in what can otherwise be a time-consuming part of the process.
• Better Communication Across Time Zones: If you’re on the mainland or overseas, coordinating with a Hawaii-based lender in the same time zone as your escrow team, real estate agent, and title company streamlines the communication process.
• Increased Offer Strength: In competitive markets, sellers and listing agents may view a buyer with a local pre-approval more favorably, as it signals reliability and a higher chance of closing on time.

When a Mainland Lender May Still Work:

• If you already have a trusted lender with experience financing Hawaii properties, especially second homes or investment properties, it may be worth comparing rates and terms.
• Just ensure they understand Hawaii-specific guidelines and are approved to lend in the state.

TIP: Even if you're pre-approved by a mainland lender, it’s wise to get a second quote from a local lender in Hawaii. You may find better rates, lower fees, or a more responsive team that can help ensure a smoother closing.

Helpful Resources:

• Financing a Home in Hawaii – Mortgage Calculator
• Understanding Condotel Lending Rules in Hawaii
• Need help connecting with a trusted lender in Hawaii? Contact Penn for recommendations.

The typical home-buying process in Hawaii takes 30 to 45 days, from the time an offer is accepted to the official closing date. However, the full timeline can vary based on several factors, including your financing method, property type, and your level of preparedness as a buyer.

General Timeline Overview:

• Home Search & Offer: 1–4 weeks (or longer, depending on inventory and buyer preferences)
• Offer Accepted & Escrow Opens: Day 1 of the transaction
• Inspection Period: Typically, the first 10–14 days
• Appraisal & Loan Approval: 2–3 weeks, if financing
• Final Loan Documents & Signing: Final week before closing
• Closing & Recording: Usually occurs on Day 30–45

Factors That May Affect the Timeline:

• Cash Purchases: Can close faster, sometimes in as little as 10–14 days, since there’s no loan approval or appraisal contingency required.
• Financing: Mortgage-backed purchases typically take closer to 30–45 days, depending on the lender’s processing time and appraisal scheduling.
• Condos or Leasehold Properties: May require additional review periods for HOA documents or lease agreements.
• Mainland or International Buyers: Logistics such as time zones, notarizations, or document shipping can slightly extend the timeline.

Tips to Stay on Track:

• Get pre-approved by a Hawaii-based lender (if financing).
• Work with an experienced local REALTOR®, such as Penn, who can coordinate inspections, timelines, and communication.
• Be responsive to requests from escrow, lenders, and your agent to avoid delays.

Helpful Resources:

• Step-by-Step Home Buying Timeline in Hawaii
• Big Island Home Buyer’s Guide
• Contact Penn to get started or ask questions about current market timelines.

Yes, short-term vacation rentals (STVRs) in Hawaii are heavily regulated, and the rules vary by island and county. On the Big Island, where vacation rentals are popular, the County of Hawaii has established strict guidelines that determine where and how STVRs can legally operate.

Key Points to Know:

• Definition: A short-term rental is typically defined as a rental of fewer than 30 consecutive days.
• Registration Required: All STVRs on the Big Island must be registered with the County of Hawaii and display a valid STVR registration number.
• Zoning Restrictions: Only properties in approved zoning districts (such as resort, commercial, or certain residential areas) are eligible for short-term rental operation.
• Nonconforming Use Permits: Homes outside of allowed zoning that were legally operating prior to the law’s adoption may apply for a Nonconforming Use Certificate (NUC) to continue operations. These permits must be renewed annually and are non-transferable.
• Condominiums: Not all condos are STVR-eligible. Only specific developments allow vacation rentals by zoning or HOA policy. It's essential to confirm current rules before purchasing.
• HOA Rules May Vary: Even if zoning allows STVRs, a homeowners association (HOA) may have its own restrictions or prohibit them entirely.

Buyer Tip:

If you’re purchasing a property to operate it as a vacation rental, verify its legal short-term vacation rental (STVR) status upfront. This includes reviewing zoning maps, county permits, HOA rules, and any applicable deed restrictions.

Helpful Resources:

• Hawaii County Short-Term Vacation Rental Ordinance
• Search STVR-Approved Properties on the Big Island (custom link if available on your site)
• Contact Penn for expert guidance on buying a vacation rental property in Hawaii.

On the Big Island of Hawaii, lava zones are a key consideration when buying property. These zones are used to assess volcanic risk and can directly impact your ability to obtain insurance and financing.

What Are Lava Zones?

The U.S. Geological Survey (USGS) has divided the Island of Hawai‘i into nine lava zones, ranging from Zone 1 (the highest risk) to Zone 9 (the lowest risk). The zones are determined by the historical frequency and path of lava flows, based on proximity to active volcanoes such as Kīlauea and Mauna Loa.

• Zone 1: Highest hazard. Includes areas near active rift zones and frequent lava activity (e.g., parts of Puna).
• Zone 2: Still high risk, but slightly less frequent flow activity than Zone 1.
• Zones 3–9: Progressively lower risk. Most homes in North Kona, South Kohala, and Hilo Town are located in Zones 3 through 9.

How Lava Zones Affect Insurance:

• Home Insurance: Properties in Lava Zones 1 and 2 may face higher premiums or limited availability of standard insurance policies. Most national carriers will not insure homes in these zones.
• Specialized Coverage: Many homeowners in high-risk zones use Hawaii Property Insurance Association (HPIA), a state-created entity that offers basic coverage where private insurers decline.
• Mortgage Lenders: Lenders may require proof of insurability before approving a loan. In high-risk zones, this can make financing more complex or delay closing.

Should You Avoid Lava Zones 1 & 2?

Not necessarily, but buyers should be fully informed. Many people live in these zones safely and comfortably, but it’s important to factor in:

• Insurance availability and cost
• Evacuation planning and infrastructure
• Potential resale challenges in the future

Helpful Resources:

• USGS Lava Zone Map (Big Island)
• Hawaii Property Insurance Association (HPIA)
• Search Properties by Lava Zone (Use Search Filters "More")
• Contact Penn to get property-specific lava zone info and insurance insights.

Title insurance is not legally required in Hawaii, but it is highly recommended—and in most cases, required by your lender if you’re financing the purchase.

What Is Title Insurance?

Title insurance protects buyers and lenders against financial loss due to defects in a property’s title, such as:

• Unknown liens or encumbrances
• Recording errors
• Forged documents or fraudulent transfers
• Boundary disputes
• Undisclosed heirs or ownership claims

Unlike other types of insurance that protect against future events, title insurance covers past events that may affect the legal ownership of the property.

Two Types of Title Insurance:

1. 1.) Lender’s Policy

• • Required if you are obtaining a mortgage.
  • Protects the lender’s interest in the property until the loan is paid off.
  • Typically paid by the buyer at closing.

1. 2.) Owner’s Policy

• • Optional but highly recommended.
  • Protects your ownership interest for as long as you own the property.
  • Often offered as a one-time premium at closing, and may be discounted when purchased with a lender’s policy.

Hawaii-Specific Notes:

• In Hawaii, title insurance is ordered during escrow and issued through a licensed title company.
• The cost is based on the property’s purchase price and is typically split according to local custom. For example, in many parts of the Big Island, sellers pay for the owner’s policy, and buyers pay for the lender’s policy, although this is negotiable.

Should You Get It If You’re Paying Cash?

Yes. Even cash buyers should strongly consider purchasing an owner’s title policy. It provides long-term peace of mind against costly title disputes that may arise after closing.

Helpful Resources:

• What Does Title Insurance Cover? (American Land Title Association)
• Contact Penn for a trusted title company recommendation and help reviewing title reports.

Yes. Hawaii’s escrow process has several unique features that differ from real estate transactions on the mainland. Understanding these distinctions can help ensure a smoother closing.

What Is Escrow?

Escrow is the neutral third-party process that manages the legal and financial details of a real estate transaction, from earnest money deposit to final recording. In Hawaii, escrow is typically handled by a licensed title and escrow company, which also issues title insurance.

Key Differences in Hawaii’s Escrow Process:

• Attorney Not Required: Unlike many mainland states, Hawaii does not require attorneys for standard real estate closings. Escrow officers manage most of the documentation and coordinate between all parties (buyer, seller, agents, lender, etc.).
• Recording = Closing: In Hawaii, the sale is considered officially closed when the deed records are filed at the Bureau of Conveyances in Honolulu (typically one business day after signing). This is different from “table closings” in some states.
• Use of Escrow Timelines: Purchase contracts in Hawaii are typically date-driven, with specific deadlines (as opposed to contingency-based). Each party must adhere to set timeline milestones, such as inspection, appraisal, loan commitment, and final review periods.
• HARPTA/FIRPTA Withholding: Out-of-state or foreign sellers may be subject to tax withholding at closing (HARPTA or FIRPTA). The escrow company handles these withholdings and ensures compliance with state and federal regulations.
• Notarization Requirements: Documents often require notarization in person, and for mainland or international buyers, this may involve scheduling an appointment with a notary public or a U.S. embassy or consulate.
• Wire Transfers Preferred: Hawaii escrow companies usually require electronic wire transfers for both earnest money and final payment of closing funds. Checks are rarely accepted.

Tips for Buyers:

• Select an escrow company with experience in Hawaii-specific transactions.
• Be aware of time zone differences when coordinating documents and wires.
• Work closely with your REALTOR® to stay ahead of deadline requirements.

HELPFUL RESOURCES (LINKS):

• Step-by-Step Overview of Hawaii’s Escrow Process
• Understanding HARPTA & FIRPTA
• Contact Penn for guidance on Hawaii escrow companies and buyer timelines.

HARPTA stands for Hawaii Real Property Tax Act. It is a Hawaii state tax withholding law that primarily applies to non-resident sellers, not buyers. However, buyers do play an important role in the process.

What HARPTA Does:

HARPTA requires buyers to withhold 7.25% of the gross sales price when purchasing real property in Hawaii from a seller who is not a resident of the state. This amount is sent directly to the Hawaii Department of Taxation at closing as a prepayment toward the seller’s potential capital gains tax liability.

Does HARPTA Apply to Buyers?

• While HARPTA is a seller obligation, the buyer (through escrow) is responsible for collecting and submitting the withholding to the state.
• If HARPTA is not properly withheld, the buyer could be held liable for the unpaid tax, which is why escrow companies handle this process carefully.

Buyer Responsibilities Under HARPTA:

• No action is required if the seller is a Hawaii resident (must be verified with a signed declaration).
• If the seller is a non-resident, escrow will withhold the required 7.25% and submit it on the buyer’s behalf.
• HARPTA applies regardless of whether the seller made a profit or loss on the sale—it is based on gross sales price, not net gain.

Additional Notes:

• HARPTA is separate from FIRPTA, a federal tax withholding that applies to foreign sellers.
• Sellers can apply for a withholding exemption or refund from the state after the transaction, depending on their tax situation.

Why This Matters for Buyers:While HARPTA doesn’t impact your taxes directly, understanding it helps avoid surprises at closing and ensures that all parties are in compliance. Your escrow officer and REALTOR® will guide you through the necessary steps.

Helpful Resources:

• Hawaii Department of Taxation – HARPTA FAQ
• HARPTA vs FIRPTA – What’s the Difference?
• Contact Penn with questions about HARPTA and how it may apply to your transaction.

Yes, using a local real estate agent is strongly recommended when buying property in Hawaii. The real estate market here is unlike anywhere else in the U.S., with unique zoning laws, volcanic hazard zones, leasehold ownership structures, and vacation rental restrictions that require in-depth, on-island knowledge.

Benefits of Working with a Local Hawaii Agent:

• Island-Specific Expertise: Local agents understand Hawaii’s distinctive property types (fee simple vs. leasehold), lava zones, and land use laws—helping you avoid costly mistakes.
• Up-to-Date Market Knowledge: A local agent is familiar with current pricing trends, competitive offer strategies, and which neighborhoods are hot or up-and-coming in areas such as Kailua-Kona, Kohala Coast, Waimea, and Hilo.
• Trusted Local Network: From lenders and escrow officers to inspectors and contractors, local agents have established relationships that streamline the buying process and keep transactions on track.
• In-Person Guidance: Whether it’s touring homes, attending inspections, or handling document signings, your local agent can be there physically on the island, representing your interests—even if you aren’t.
• Vacation Rental and Zoning Rules: Understanding short-term rental regulations and community-specific restrictions is crucial for buyers considering income properties. A Hawaii-based agent will help navigate these local ordinances.

Remote Buyers:
Even if you're purchasing from the mainland or internationally, a Hawaii-based agent will be your eyes and ears on the ground, coordinating virtual showings, inspections, and document handling to ensure a seamless process.

Helpful Resources:

• Why Work With a Hawaii Real Estate Expert
• Meet Penn Henderson – Big Island Realtor
• Contact Penn to start your Hawaii home search with a local expert.While it’s possible to purchase a condo without a buyer’s agent, having professional representation is highly recommended—especially in Hawaii, where real estate laws, ownership structures, and condo-specific rules differ from the mainlandWhy Work with a Local Agent:

Understanding Leasehold vs. Fee Simple:
A local agent can help you avoid surprises by explaining the legal and financial differences between these two ownership types, which are more common in Hawaii than elsewhere.

Guidance on HOA Rules, Fees & Restrictions:
Your agent will help you review pet policies, vacation rental rules, reserve funding, and other important details before submitting an offer.

Expert Navigation of Local Escrow & Title Process:
Hawaii’s real estate system has unique steps, timelines, and regional customs. A knowledgeable agent ensures nothing is overlooked.

Access to Off-Market & Upcoming Listings:
Many luxury and investment properties are not publicly listed. Agents often have insider access to these opportunities.

Contract Negotiation & Due Diligence:
Your agent works to protect your interests, helps coordinate inspections, reviews condo documents, and ensures key deadlines are met.

Helpful Resources:

• Search Big Island Condos »
• Big Island Buyer Representation »
• View Penn's Big Island Buyer’s Guide »
• Contact Penn to Get Started »