What Canadian Buyers Need To Know BEFORE Buying In Hawaii


Canadians LOVE Maui and we LOVE our Canadian clients! We have identified some specific considerations for Canadian buyers.


Title and Escrow

In Hawaii we use title companies and escrow officers to handle the transfer of the property, including the deed.  This is different from the process that you are used to in Canada.  The escrow officer, in addition to your Realtor, will communicate with you regarding issues of title, signatures, inspection time lines or other issues dealing with ownership and title.

This process can take 60 days or longer to complete if the purchase is being financed. Cash transactions can be completed in 30 days.


There are a variety of fees and taxes that are customary in the US that you may not be used to and are in addition to the purchase price.  These may include:

  • Escrow Fees
  • Title Insurance
  • Appraisal Fees
  • Attorney Fees
  • Inspections

Your Realtor should be able to give you a breakdown and estimate of all the fees that apply to you and your transaction.


  • Mortgage Rules are different in the US, where you can finance up to 30 years or
  • Lenders must be licensed in Hawaii, so you can’t use a Canadian lender to finance a Hawaii However, you can get a loan such as a second mortgage on your home in Canada and use the money from that loan to make a cash purchase in Hawaii.
  • Do you have established good US credit? If so, that could make the lending process go more smoothly.
  • Canadians typically need at least 30% down to get a loan (35% on condo-tels such as Aina Nalu or Kaanapali Shores).
  • Canadians also typically pay ½ to ¾% higher loan rate than standard domestic buyers.
  • Before making an offer on a property, it’s important to get prequalified by a Hawaii lender and gather the financial documents that will be required for the loan application, including pay stubs, tax returns, proof of available cash for down payment, etc.

Tax Issues

  • Non-US citizens are subject to FIRPTA (Foreign Investment in Real Property Tax Act of The act requires that 10-15% of the sale price is withheld from the seller’s proceeds at close of escrow to ensure US taxes on the gain are paid. Once a U.S. tax return is filed, any overpayment is returned.
  • HARPTA (Hawaii Real Property Tax Law) requires that 5% of the sale price be withheld at closing. Once a Hawaii tax return is filed, any overpayment is
  • There is 30% withholding on rental income to assure that US taxes are paid (if the Canadian owner doesn’t have a TIN – Taxpayer Identification Number).
  • All foreign investors will need a TIN number in the If they are not renting their property they may not need this immediately, however it will be required when they sell or rent the property. Pam Teal of Fidelity National Title recommends Canadians get the TIN at the time of purchase.
  • Also, if a property will be rented to tenants or guests, the property owner needs to have a business license for collecting GET (General Excise Tax) and TAT (Transient Accommodations Tax) and needs to file regular returns to submit the taxes The application for this license can be obtained at http://www6.hawaii.gov/tax/2011/bb1packet.pdf.
  • Real estate property taxes vary depending on how the property is being For hotel/short term rental usage, the tax rate for 2015-2016 is $8.85 per $1000 of assessed value; for long term rental or apartment usage, the tax rate ranges from $5.40 to $6.00 per $1000 assessed value, depending on whether the property is considered residential or apartment. Owner occupants are assessed taxes at $2.75 per $1000 and enjoy an exemption on the first $200,000 of assessed value.
  • Canadians are urged to consult their tax attorneys regarding additional tax considerations, including estate taxes.
  • Further information regarding tax issues for Canadians can be found at http://www.bdo.ca/library/publications/tax/taxbulletins/Tax_Issues031708.cfm.

Signing Documents

Some documents will have to be notarized by a US notary. The instructions will likely direct you to do the signing at the US Embassy. That will likely require scheduling an appointment and can be time consuming. You should try to schedule this appointment two weeks in advance. It may be simpler to make the drive across the border to a notary in the US.


If the utilities are to be in the name of the new foreign owner, as opposed to a condo-tel, Maui Electric will at least require notarized ID’s in order to open an account.

There are no mainland banks on Maui – only local Hawaii-based banks.  (No Wells Fargo, Bank of America branches exist in Hawaii.) If you plan to have rental expenses such as electricity paid out of a Maui account or rental revenues deposited into a Maui account, you will need to open a local bank account.

Property Management

Off island property owners who rent their property are required to hire a licensed property manager to manage the property. Property managers for long term rentals usually charge a fee of approximately 10%, while short term property managers charge fees from 25%-40% or higher, depending on services provided and how the management company is structured.

Terms and Definitions

Strata fees = AOAO fees

Subjects = contingencies:  I’m told that in Canada they typically remove the subjects within 7 days.  Our contingency and inspection periods can be much longer.

As Is – I’ve heard that in Canada when a home is sold, the seller must bring all aspects of the home up to code.  In Maui, the seller is required to disclose anything that is not “in compliance”, and the home inspector may identify items that do not meet current code.

Many properties are sold “AS IS”, meaning that the seller will not make repairs to the property before closing. Repairs are typically negotiated during the contract inspection period for properties that are not being sold “AS IS”.


Thanks to Pam Teal at Fidelity National Title.

Special thanks to the Best Real Estate Team in the Greater Vancouver area -  Team Josh Bath - Matt, Terri and Josh.