Many Canadians are considering buying real estate on Maui and, as such, have a series of questions we thought we'd address up from. In no particular order, here we go!

Q: What is the difference between fee simple and leasehold ownership?

A: Fee simple is straightforward ordinary ownership of real estate. Nothing to worry about there. Leasehold means that the condominium complex leases the underlying land that complex is located upon from a third party. The risk of that is that one's economics can change when the underlying lease is renegotiated upon expiration. Be very careful with this type of ownership to understand the details on the leasehold.

Q: How should I take title?

A: This is largely an individual question best answered by one's accountant.

Q: What tax issues are raised by Maui ownership?

A: Again, this question is best answered by your accountant, but you will become a Hawaii and US taxpayer with regard to your Maui property. This is mostly relevant if you are renting your property or when you sell it.

Q: What are Harpta and Firpta?

A: These are withholdings upon the sale of Hawaii property by a non-Hawaii resident (HARPTA) and a non-US citizen (FIRPTA). A percentage of the sale of real property is withheld until the seller has filed and paid capital gains due, if any. This is not an incremental tax, but a witholding until taxes are paid, then the balance is refunded to the seller.

Q: How do we sign papers for a mortgage and closing?

A: Either one can do so on island while you are visiting, or you can do it back home in Cananda. If you do the latter, you must go to a US Consulate to get a proper US Notarization completed.

With so many Canadians now buying  Maui real estate, the system is reasonably streamlined and straightforward. For details, contact us!