Did you know, Maui is the #1 Island Destination in the entire world? It has been ranked #1 for many years. People from all over the world flock to Maui because...well, I can't think of a better place to be. Can you? From the perfect climate to the Aloha Spirit - There is no place on earth that compares to Maui. It truly is paradise.
I would like to share with you my experience of moving to Maui. My husband and I had visited the Big Island, Kauai, and Oahu on previous vacations, and always had an extraordinary time. It was a little sad for us when it came time to leave, but we knew we would be back next year. The time came to start planning our next vacation to Hawaii and we decided to "check out" Maui. It almost makes me laugh, how we were making such a casual decision with no idea we were about to change our lives forever.
We arrived on Maui in January. Coming from Colorado it was a refreshing change in climate to say the least. It was perfect! The following year, we vacationed on Maui again. We returned to our home in the mountains of Colorado and talked about moving to Maui. I didn't know what it was going to take, but I knew we had to live here. We went over the figures, researched exactly what it would take to make this dream come true, and made our "five year plan".
After following our plan for 2 years, we decided it was time to make the move - ready or not. We returned to Maui and this time we meant business. We were ready to tackle any obstacle that stood in the way of our dream. By the end of our stay, we had a house in escrow and returned to Colorado to prepare for our move.
After that, everything fell into place. One by one our businesses, investment properties, and home in the mountains were sold. We packed up our belongings, prepared our two beautiful dogs for quarantine, and we were off to live our dream.
The quality of life is better here. Additionally, one of our dogs was diagnosed in Colorado with a crippling disease that had progressed to the point where she was barely able to stand up. The veterinarian didn't think she would live much longer. Since our move to Maui, she is like a spunky little puppy again. Many people have had similar experiences. Some think Maui possesses healing powers, but I know it does.
Now that you know my story, it would be an honor for me to help you make your own. Visit my website, use its tools, and be sure to email me with any questions you may have. My being here is proof that I make dreams come true. When thinking of Maui, always remember, I am here for you.
"Dreams of Paradise Do Come True! Let Me Show You How!"
Your costs for a condo will vary from complex to complex. The following information is meant to be used as a guide, and is not guaranteed to include all costs associated with ownership.
Somewhat fixed costs will include maintenance fees, lease rent, property taxes, mortgage payments, and a content/liability insurance policy for the interior of your condo. Fluctuating costs will include electric, telephone, additional cable/internet, and management fees.
The maintenance fees will vary with each complex and will include water, sewer, trash removal, structure insurance, exterior building maintenance, liability insurance for the common areas, and grounds maintenance. Most complexes also include basic cable in the maintenance fees, but a few do not. Some condos include electric in the maintenance fees, so their fees are a little higher, but your costs are more controlled. A few other complexes include gas in the fees and use gas for the ranges, dryers, and hot water, which also reduces the electric costs.
If the condo is leasehold, you will also have a monthly lease rent fee.
Detailed information on Maui property taxes may be found here: Maui Property Tax Site
Property tax rates are based on how you use the condo and are paid semi-annually either by you or your mortgage holder.
I highly recommend that you obtain a contents/liability insurance policy for the interior of your condo. This type of policy can cost $150 or more annually, depending upon the coverage you request. The complex provides the structure insurance for the building and liability insurance for the common areas, but does not cover your interior space. When you are renting the condo, it is always recommended to have that extra liability coverage for inside your condo, just in case someone gets hurt in the unit.
The electric will be one of the major fluctuating costs. If your condo has air conditioning and the electric is not included in the maintenance fees, the costs can vary greatly with the guest staying in the condo. Most guests are conscientious and only use electric as needed. Others are on vacation and run A/C constantly with doors/windows open, raising the electric bill. Some owners have put timers on the A/C to reduce the careless misuse. Others do not have A/C in the condo. Typical electric bills would be $80-$250, depending upon the size of the condo, but can be higher depending upon the guest in the condo.
Another cost could be basic telephone which is usually between $25 and $30 per month. As I said, most units include basic cable in the maintenance fees, but for those few that don't the cost would be approximately $50 per month.
If you use your condo as a rental when you are not here, Hawaii state law requires you to have a property manager. If you are in the apartment zoned district, you can only rent the condos a minimum of 6 months at a time (long term rentals). The management fee for long term rentals is typically based upon a percentage of the gross monthly rental income and may vary depending upon the manager chosen. There is also a general excise tax of 4% due on the gross rental income collected. You can collect it separately from the tenant, or just include it in the rental amount. It is usually paid to the state quarterly or semi-annually (determined by the state).
If you are in the hotel/resort zoned district, you can rent the condo for any length of time, and those property managers will charge between 20 to 55% of the gross rental income with fees varying and dependent upon the manager chosen. There will be a general excise tax of 4% of the gross rental income, plus a transient tax of 9.25% due on the gross rental income collected. This is collected from the vacationer separately from the rental amount and is also due to the state quarterly or semi-annually (determined by the state). These taxes are not really additional expenses for you since they collected from the tenants/guests, but it is an additional responsibility of collecting the taxes and filing tax returns.
I hope this information is useful and helps in your research. Owning a Maui condo can prove to be a very good investment.
Maui County is fortunate to have reasonable property taxes. If you live in your home or condo full time, you may qualify for a homeowner's exemption which will lower your tax.
Is your home/condo your primary residence? Do you claim this property as your principal residence when filing your Hawaii and Federal tax returns? If your answers to these questions are "yes" you may qualify for the homeowner's exemption which will reduce your tax basis.
If you file the form before December 31st, you will have the exemption applied to your tax basis beginning with July 1st of the following year. If you miss the December 31st deadline, the exemption will not be applied and will be delayed another year until the following year's July 1st. Example 1: Application filed 12/28/2011 - new tax begins 7/1/2012.
Example 2: Application filed 1/2/2012 - new tax begins 7/1/2013.
Here is a link to the county site where you may download the homeowner's exemption form.
Be sure to complete and mail this form in plenty of time for the county to receive the form before the end of the year. One day late and you will miss out on a whole year of the reduced taxes - no exceptions made.
Since Maui is an island, it is very important to recycle whenever you can. Items that are no longer useful to you can be very helpful to someone else. Check with some of your favorite charitable organizations before throwing out those gently worn or used items.
One of my favorite places is www.freecycle.org. You can post your unwanted items onto this website, and an e-mail is sent to all subscribers. Usually your unwanted item finds a new home within the first day or two.
When cleaning out your clothes closets, package up the ones that no longer fit and call Big Brothers/Big Sisters at 808-242-9754 or Kidney Clothes at 808-270-8890.
Have you recently made renovations? Take your old appliance to A-1 Recycled Appliances, 808-242-6937 and your furniture to Habitat For Humanity-Restore, 808-893-0334.
Graphics Technology, 808-879-9390 will recycle your household electronics.
Recycle metals at SOS Metals Island Recycling, 808-280-8844 or Reynolds Recycling, 808-385-1867. Paints and solvents can be taken to Unitek Solvent Services at 808-877-2667.
And of course, don't forget about helping our keiki! The Realtor Association of Maui's Wishing Well Program has been a large success due to all the caring people like you. Please contribute any furniture, books, and school supplies, backpacks, computers, desks, projectors and anything else you have that can help our schools educate our kids. And if you have a few extra dollars, it will help provide lunches for the children who may not otherwise have a meal today. Contact your local realtor to make your donations or arrange for pick up of your items (and I hope you contact me!).
Buyers in this real estate market are in a very good position. With surplus inventories of homes and condos, sellers are extremely happy to have any offer. If you are looking to get a great price considerably lower than the seller's asking price, then your offer has to be extremely appealing or you are either going to receive a counter offer from the seller, or worse, you will just be rejected or receive no response.
Before going out to look at what is available find out exactly what you are qualified to buy. If you do not have substantial sums of cash on hand to make a cash offer, this means contacting your lender, or contacting your realtor to obtain a lender recommendation. Explain to the lender what you wish to accomplish - buy a 2nd home, a vacation rental condo, or whatever it is you would like to buy. The more information you can provide, the better he can determine the rates and price range. Also provide your bank statements, tax returns, and anything else the lender requires in order to give you a pre-approval letter. A pre-approval letter shows that your documents have had a preliminary review and you have already been pre-approved for a loan. In the past lenders readily gave pre-qualification letters to anyone who called in and stated that they had an income - nothing was verified.
When presenting offers to sellers with a pre-approval letter, you are showing the seller that you are serious, have already contacted a lender and the lender has already reviewed and approved your documents. In the current state of the mortgage industry, having a pre-approval letter versus a pre-qualification letter is critical.
Even though your offer may not be the dollar amount the seller is looking for, being pre-approved has the seller thinking twice before countering or rejecting the offer. Offers are not as plentiful as they were in years passed, so sellers do not want to lose the opportunity to sell when an opportunity exists. Try to be reasonable in the offered amount and keep contingencies to a minimum. To strengthen the offer, attach a cover letter supporting the price and terms of your offer. Citing recent comparable sales also helps. Always try to make it a win/win transaction.
Having a cash offer with a short escrow period and few contingencies goes a long way in this market. With lender restrictions changing daily, cash in hand most often will obtain a property at a lower price than one at a higher offered price but with loan restrictions.
One of the most frequently asked questions when buying Maui properties is "What are the property taxes?"
Maui does not have one set tax rate for all properties. Instead, it has many different rates based on how the owner intends to use the property and how the property is zoned. Maui's property tax rates are actually very reasonable when compared to other state's property tax rates.
Here is some additional information regarding property tax rates and some examples showing you how to calculate estimated annual property taxes. Please keep in mind the calculations will be estimates. When the county assesses your property, the tax base may be more or less than the purchase price.
Property taxes are based on 100% of assessed value which is 100% of market value. The property tax rates are based on use. If you plan on occupying the home or condo you can apply for a homeowner's exemption of $200,000.
When you purchase a home or condo, you inherit the current tax rate of the seller until July 1st of the following year after closing and then your tax rate will take effect. If you will be owner occupied, you must apply for your exemption by December 31st in the year of purchase in order to receive the exemption by July 1st of the following year. If you do not, the exemption will not take effect until July 1st of the year following the year you filed.
Here is an example to show you how to calculate the property tax for a condominium/home that will be owner occupied:
You purchase 3/31/13. You receive the current owner's tax rate until 7/1/2014.
You file your exemption form by 12/31/13. You receive a $200,000 homeowner's exemption.
Your new tax rate is $2.78 per $1000 of assessed value which is 100% of market value.
Your tax is calculated as follows:
Assessed value $345,000
Less homeowners exemption $200,000
Tax base $ 145,000
$2.78 x 145 = $403.10 per year, or$33.59 per month, which will not begin until 7/1/14. You inherit the current owner's tax until 7/1/14 when your new rate goes into effect.
Exemptions are only given for owner occupied and only if applied for. If you fail to apply for the homeowner's exemption by 12/31 you will not receive the exemption for the following year's tax calculations. You can apply before 12/31 the following year, but will pay the higher tax until July 1st of the year following application.
The rate for investment property used as rentals for periods longer than 6 months (long term rentals) is $5.57 for residential zoned and $6.20 for apartment zoned per $1000 of assessed value and no exemptions are granted.
The rate for investment property used as rentals for periods less than 6 months (vacation rentals) is $9.11 per $1000 of assessed value and no exemptions are granted.
Example for calculating vacation rental property taxes:
Assessed value $345,000
You purchase 3/31/13. You receive the current owner's tax rate until 7/1/2014.
Purchase price/assessed value $345,000
No exemption 0
Tax base $345,000
$9.11 x 345 = $3142.95 per year or $261.91 per month, which does not begin until 7/1/14. You inherit the current owner's tax rate until 7/1/14 when your new rate goes into effect.
Here is a link to an explanation of the different uses and the property tax rates:
Living on Maui is the ultimate dream for many, and then, having a boat is living that dream to its fullest!
Unfortunately, since there is limited mooring space, renting a slip is not that easy. All of Maui harbors currently have a 20 year wait list for permanent slip rentals. The staff at the harbors will try to accommodate boat owners on a temporary basis and will rent what is available for short periods of time. There is no guarantee that anything will be available when you need it, but the cost can be between $3.95 per day and up depending upon where the available temporary slip is located.
In some instances you may be able to make an agreement with someone who has a permanent slip and rent directly from them, but this is a rare occurrence.
Another option may be off shore mooring. You are allowed to moor your boat off shore in designated areas. Be sure to contact the DLNR Boating division to determine an available location.
Here is a link to the harbor contact information for each of the Hawaiian islands: http://www.hawaiiocean.com/Directories/Marina%20Facilities/index.html
Additionally, many owners store their boats on land at private residences or storage areas. It may not be the most desirable storage method, but at least you are able to have your boat on Maui!
Have you been having problems breathing? itchy or watery eyes? sore throat? frequent nosebleeds? You may have high levels of mold growing in your home. Mold is a fungus that grows in damp, dark places. As with all fungi, it spreads its spores through the air to grow. The same air that you and your family breathe. Over the past few years, there have been many studies on the adverse effects mold has to our health. They have even found that some types of mold are toxic. This is not something you and your family can live with. Please look over the following links to further educate yourself on the dangers of mold in your home. Learn how to detect and destroy this airborn monster.
In lieu of a sales tax, the State of Hawaii imposes a General Excise Tax, or GET, on all business activity in the State. The GET is charged at a rate of 4% for most businesses and 0.5% for wholesalers. The tax is imposed on all business entities, so in essence, the tax is collected at every level of production (material supplier to manufacturer to wholesaler to retailer) producing a "cascade effect" effectively adding 16-18% to the price of consumables purchased at retail. The GET is also charged on all business service activity such as real estate agent commissions, lawyer fees and the like. With Hawaii's industry heavily dependant on tourism and tourist spending, the State regularly raises nearly half its government revenues through the imposition of the General Excise Tax.
The Hawaii State Department of Taxation has a list of questions for review.
The transient accommodations tax commonly called the "TAT", is a tax imposed on certain rental activity in the Hawaii Like the general excise tax, it is a tax levied on gross income. However, it is imposed only on gross rental income derived from the furnishing of accommodations occupied by a transient for less than 180 consecutive days. The tax rate is 9.25%.
The Governments want you to pay your Capital Gains Taxes and the
State of Hawaii wants you to pay your GET and TAT Taxes.
Though the Law makes the Buyer carry the burden of withholding the taxes
(as an employer does) and pay them to the governments, as a
practical matter the Escrow Company does it on behalf of the Buyer.
So the following are the applicable provisions that you will see in any
standard sales contract.
TRANSACTIONS INVOLVING FOREIGN OR NON-RESIDENT BUYER AND SELLER
C-38 HARPTA Withholding Required if Seller is a Non-Resident of the State of Hawaii. Under Hawaii law, if Seller is a
non-resident person or entity (corporation, partnership, trust, or estate) of the State of Hawaii, Buyer must withhold a
specified percentage of the "amount realized" by Seller on the sale of the Property and forward the amount with the
appropriate form to the State Department of Taxation. Such withholding may not be required if Seller obtains and
provides Buyer with an authorized exemption or waiver from withholding. If Seller does not provide Buyer with a
certificate of exemption or waiver from HARPTA within fourteen (14) days of the Acceptance Date, Escrow is hereby
authorized and instructed to withhold/collect from Seller the required amount at closing and forward it to the State
Department of Taxation.
TRANSACTIONS INVOLVING FOREIGN OR NON-RESIDENT BUYER AND SELLER
C-39 FIRPTA Withholding Required if Seller is a Foreign Person. Under the Internal Revenue Code, if Seller is a foreign
person or entity (non-resident alien, corporation, partnership, trust, or estate), Buyer must generally withhold a specified
percentage of the "amount realized" by Seller on the sale of the Property and forward this amount with the appropriate
Internal Revenue Service ("IRS") form. Such withholding may not be required if Seller obtains and provides Buyer with
an authorized exemption or waiver from withholding. If Seller does not provide Buyer with a certificate of exemption or
waiver from FIRPTA within fourteen (14) days of Acceptance Date, Escrow is hereby authorized and instructed to
withhold/collect from Seller the required amount at closing and forward it to the IRS.
C-40 Additional Disclosures Required by Foreign Buyers and Sellers. Buyer and Seller understand that under statutes
and ordinances such as the Agricultural Foreign Investment Disclosure Act of 1978, the International Investment and
Trade in Services Survey Act, and the revised Ordinances of the City and County of Honolulu, among others,
disclosures are required by foreign Buyers and/or Sellers under certain conditions.
INVESTMENT PROPERTY EXCHANGE SERVICES, INC.
600 Kailua Road, #206
Kailua, HI 96734
(808) 262-1807 (Fax)
OLD REPUBLIC EXCHANGE COMPANY - OREXCO
733 Bishop Street, Suite 270
Honolulu, HI 96813
(808) 528-3837 (Fax)
Philip Gonzalez, CES
FIRST AMERICAN EXCHANGE COMPANY
333 Queen Street, Suite 806
Honolulu, HI 96813
(808) 532-1034 (Fax)
American Savings Bank
VP of Mortgage Lending NMLS# 774552
173 Hoohana St. A202
Kahului HI, 96732
First Hawaiian Bank
Aloha Mortgage Loans
Manager/ Mortgage Loan Originator
1325 S. Kihei Rd., Ste. #213 / Kihei, HI 96753
Office: (808) 874-7008 / Cell: (808) 264-6503
Fax: (888) 809-8261
State Farm # 808-877-5273
Hawaii Insurance Consultants # 1-877-543-9789
Servco Insurance Services # 808-877-5053
Royal Insurance Agency # 808-244-7245
Island Insurance Companies # 1-888-312-2525
Wessel & Associates # 808-986-1400
Atlas Insurance Agency # 1-888-311-2525
AIG Hawaii # 808-244-3131
Allstate Insurance # 800-255-7828