Can You Buy Property in Hawaii

Who Can Buy Property in Hawaii?

Anyone—from U.S. residents to international buyers—can purchase property in Hawaii and enjoy full ownership rights. There are no state restrictions on ownership based on residency status. This means that you are legally permitted to own real estate in Hawaii, whether you live in California, Canada, or Tokyo. As highlighted by EnviroLiteracy, even non-residents can purchase property, but they must respect Hawaii’s unique cultural and environmental regulations.

However, owning property does not grant residency status or special privileges. Hawaii is unique in its cultural heritage and land use regulations, so understanding these nuances is vital. Buyers should also be aware that while you can own land, a significant portion of Hawaiian property, especially on the Big Island, is leasehold, not fee simple (explained below).

Fee Simple vs. Leasehold—What’s the Difference?

Hawaii offers two distinct forms of property ownership: fee simple and leasehold. Each carries different legal rights and obligations, impacting how buyers own, manage, and transfer their properties over time.

Fee Simple 

Full ownership of the land and any structures on it. You can use, sell, or pass it on to heirs without restrictions. Most mainland properties fall under this category. It provides complete control and long-term security, making it a preferred choice for many buyers. Owners also have the freedom to make modifications or improvements as desired. 

Leasehold 

You purchase the right to occupy a property for a set period but do not own the land. After the lease expires, the property reverts to the landowner unless an extension is negotiated. Leasehold agreements often apply to apartments or specific developments, and terms can vary based on location and contact details.

We typically recommend fee simple ownership for long-term investment or residential use, especially for buyers unfamiliar with leasehold limitations. Leasehold properties may appear more affordable initially, but they often come with limitations that can impact long-term value and flexibility—especially for luxury buyers seeking generational holdings.

Where Can You Buy Property in Hawaii?

Hawaii is composed of multiple islands, each offering unique real estate opportunities. While the property is available statewide, luxury buyers tend to favor specific regions:

• Big Island (Hawai‘i Island): Celebrated for its expansive landscapes, private estates, and prestigious communities like Kukio, Hualalai, and Mauna Lani, the Big Island offers unmatched privacy and elevated living.
• Oahu: Home to Honolulu and Waikiki, a mix of urban condos, beachfront homes, and vibrant city life. 
• Maui: Popular for vacation homes and luxurious resorts in Wailea and Kapalua, ideal for relaxation. 
• Kauai: Scenic, secluded, and perfect for private estates surrounded by nature’s wonder. 

Luxury Big Island specializes in elite properties on Hawai‘i Island, offering a blend of tranquility, exclusivity, and unparalleled natural beauty, making it the ultimate destination for discerning buyers seeking a tropical paradise.

Explore premier Big Island properties currently available:

• Luxury Home on Ola Mau St, Kailua-Kona

• Luxury Estate on Olomana Road at Kohala Ranch

• Pueo Place Lot at Kohala Ranch

• Hoopai Trail Lot at Kohala Ranch

How to Buy Property in Hawaii—Step-by-Step

Buying property in Hawaii involves a series of coordinated legal and financial steps. Here’s how we help clients navigate the process:

1. Consult a Local Real Estate Attorney: Ensure your purchase complies fully with Hawaii’s property laws. 
2. Obtain Pre-Approval for Financing: This is crucial if you plan to finance your investment. 
3. Work with an Experienced Realtor: Choose a specialist in Hawaii’s luxury real estate market for expert guidance. 
4. Find Your Dream Property: Explore listings, visit properties, and assess neighborhoods to find the perfect fit. 
5. Submit an Offer: Present a well-structured purchase contract, including any necessary contingencies. 
6. Perform Due Diligence: Conduct a thorough review, including title searches, property inspections, and HOA documents. 
7. Finalize Financing: Secure your mortgage or funding to complete the transaction. 
8. Close the Deal: Complete the paperwork, transfer funds, and officially own your new home.

Financing and Mortgage Options

Financing luxury real estate in Hawaii shares many parallels with the mainland but also introduces unique considerations—especially for non-residents or international buyers looking to buy property in Hawaii. Loan options include conventional, jumbo, and portfolio products, though non-residents may be required to make higher down payments and provide more extensive financial documentation.

Additionally, Hawaii’s unique market often requires a deeper understanding of local regulations and customs. Lenders often require U.S.-based credit history or extra documents, such as proof of income or tax returns, and we work closely with lenders experienced in Hawaii’s luxury market to ensure a smooth and efficient financing process for all buyers.

Closing Costs and Legal Considerations 

Buyers should prepare for the following closing costs: 

• Escrow fees 
• Title insurance 
• Attorney fees 
• Appraisal and inspection costs 
• Transfer taxes and recording fees 

Hawaii requires a HARPTA withholding for non-resident sellers, which may indirectly affect your transaction if you purchase from one. Our firm handles all legal documentation to ensure compliance and streamline the process for both local and non-resident buyers.

Costs and Taxes of Owning Property in Hawaii

Ongoing costs include: 

• Property Taxes: Generally low compared to other states but vary by island and property type. 
• HOA Fees: Common in luxury communities, covering amenities, maintenance, and shared spaces. 
• Utilities & Insurance: These are higher due to island logistics, reliance on imports, and the potential for natural events like hurricanes or flooding. 

Also consider: 

• If you rent your property, you must pay GET (General Excise Tax) and TAT (Transient Accommodation Tax), as these can add significant costs depending on how often the property is rented out.

Do Homes in Hawaii Appreciate in Value?

Yes, Hawaiian real estate has demonstrated strong long-term appreciation. While market fluctuations do occur, demand for Hawaiian property has consistently remained high due to limited land availability and global appeal. Its unique location, stunning natural beauty, and desirable lifestyle continue to attract buyers from around the world.

According to the Federal Reserve Bank of St. Louis, the count of housing units in Hawaii has steadily increased over the years, reaching approximately 547,000 units as of 2022. This growth reflects the state’s ongoing development while maintaining its strong property values, making it a reliable investment over time.

Common Misconceptions About Buying Property in Hawaii

Despite the appeal of owning a piece of paradise, there are some common misconceptions about buying property in Hawaii that potential buyers should be aware of. Here are a few to keep in mind:

1. It’s not just about beachfront properties: While Hawaii is famous for its beaches and oceanfront homes, there are plenty of other options, like mountain retreats and rural farms, for anyone looking to buy property.
2. Not all properties have beach access: Many believe every property in Hawaii has beach access, but that’s not true. Public access points are available for everyone, no matter where they live. Work with a real estate agent to find a property that suits your needs.
3. Beachfront properties need extra care: Living near the beach means dealing with challenges like saltwater corrosion, erosion, and damage from storms. Be prepared to budget for maintenance and handle repairs to keep your property in good shape.

Do You Have to Be a Resident to Buy?

No, you do not have to be a resident. As noted earlier, no residency requirements exist for purchasing property in Hawaii. However, residency can impact your tax status, financing options, insurance rates, and long-term considerations like eligibility for certain state programs.

Other Myths:

“You can’t own land in Hawaii.”  False. While some land is held by trusts or the government, private ownership is common. 

“All properties are leasehold.” This is not true; fee simple ownership is widely available, especially for luxury buyers. 

“Outsiders aren’t welcome.” Hawaii values cultural respect. Responsible buyers are welcomed, especially those who integrate and contribute positively to local communities.

Should You Buy Property in Hawaii? Pros and Cons

Buying property in Hawaii can be deeply rewarding, but it’s essential to weigh the benefits against the challenges: 

Pros: 

• Ownership in one of the world’s most beautiful destinations 
• Strong potential for long-term appreciation 
• Access to high-end amenities and private communities 
• The diverse range of property types, from oceanfront estates to resort villas 
• Unique cultural experiences and a welcoming lifestyle 

Cons: 

• Higher cost of living and property maintenance 
• Geographic isolation (can affect shipping and travel) 
• Limited land and zoning restrictions 
• Exposure to natural risks (volcanoes, hurricanes, etc.) 
• Competitive real estate market with rising property prices 

Our firm helps buyers evaluate all aspects to ensure the right investment fit, combining expert knowledge with personalized guidance.

Explore Our Exclusive Listings on the Big Island

Our listings offer unmatched luxury and breathtaking views from beachfront estates to private retreats. The Luxury Big Island team combines local insight, legal expertise, and discreet service to make your buying experience seamless. Contact us at (808) 282 0689—we’re here to guide you every step.

Discover the finest selection of luxury real estate Hawaii has to offer and begin your journey to island living today.