Are you planning to sell your highly appreciated Hawaii rental property? Don’t let the state take a massive bite out of your equity before you even see it.

In this video, we break down the ultimate real estate magic trick: the 1031 Exchange. If you are sitting on a mountain of equity in Hawaii and want to transition to a tax-friendly state like Texas, you need to deeply understand HARPTA (Hawaii Real Property Tax Act). Many out-of-state owners and investors are completely blindsided by this requirement at the closing table.

Here is the reality: Hawaii mandates a massive 7.25% withholding on the sales price of your property—not just your profit! Let’s put that into perspective. If you are selling a $2 million property, that is $145,000 held back at closing by the state. If you do not handle this transaction correctly and that money is withheld, it does not make it to your qualified intermediary. Instead, it becomes taxable “boot,” completely undermining the benefits of your 1031 exchange and triggering a messy tax liability.

Fortunately, there is a strategic way to bypass this hurdle. We will cover exactly how to protect your cash using Form N-288B or Form N-289 before you close. Filing for this exemption proves to the state that you are executing a 1031 exchange, keeping their hands off your cash and ensuring a clean break from Hawaii.

With over 22 years of real estate industry experience specializing in the luxury residential and commercial property markets, I can help you navigate these high-stakes transactions. Whether you are a local investor looking to diversify or an international buyer adjusting your global portfolio, managing your strict timelines (45 days to identify a new property, 180 days to close) is absolutely critical. You need a broker who understands the rules on both sides of the Pacific.

Ready to strategically move your equity and protect your wealth? Let’s make sure you play by the rules, execute a clean exit, and keep your hard-earned equity fully intact for your next big investment. Watch the full video to learn how!

Jason Wong (黃浩然), MBA | Principal Broker
Island Dragonfly
Hawaii License: RB-22819

🌐 Personal Agent Website: https://jasonwong.us
🏢 Firm Website: https://islanddragonfly.com

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