Real Estate

What Canadians Must Know Before Buying a Maui Property

April 19, 2016, 12:10 PM HST
* Updated April 19, 12:14 PM
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Maui Now graphic, 2016.

Maui Now graphic, 2016.

It’s no big secret that Canadians love to visit Hawai‘i—some even decide that Maui is the best island to own a tropical vacation property.

In fact, Canadians are the most common foreign buyers of Hawai‘i real estate. When Canadians (and other foreign investors) decide to purchase Maui properties, there’s a method they’ll need to follow that is unlike the real estate buying process in Canada.

So, what do Canadian buyers need to know when buying property in Maui? Here are a tips:

Fee Simple & Leasehold

In the State of Hawai‘i, we have two types of property—fee simple and leasehold. Fee simple is the real estate term used when you buy a piece of land that you will own in-whole, including any land additions and improvements.


Leasehold is less common now, but there are still properties of this type available in Hawai‘i. With a leasehold, you are actually paying for a lease that is limited to a certain number of years: You will not own a leasehold property outright.


Up to Code

In Canada, you cannot sell a property unless it is up to code. That is not how it is in the US, where properties are commonly sold “as is.” To be transparent, Hawai‘i law doesn’t even require a seller to provide a complete disclosure on the property. Canadian buyers should make sure that any needed repairs that the seller agrees upon are negotiated in the sales contract.



A Canadian buyer cannot have a Canadian lender when purchasing property in the US. You will need to find an American lender licensed in the State of Hawai‘i.

Before you begin to search for condos or properties to buy on Maui, make sure you have your finances in order. Be prepared to provide all your financial documentation at the time of the initial offer.

If the purchase will be made in cash, you will need to have proof of funds.

Purchasing Time

In Hawai‘i, the usual amount of time to complete a property purchase is 45 to 60 days. In the beginning of the process, expect home inspections, document review and seller disclosures to take place. After that’s all set, the remaining time will be spent on loan processing, and creating and signing sales documents.

If you are buying with cash, this process could take less than six weeks.

US Taxes

If you are not a US citizen, you will be subject to the Foreign Investment in Real Property Tax Act (FIRPTA) and Hawai‘i Real Property Tax Law (HARPTA).

FIRPTA requires that 10 to 15% of the sale price of your new property is held until escrow closes. This ensures that US federal taxes on gains are payed. Any overpaid amounts will be returned once the tax return is filed.

HARPTA requires that 5% of the sales price is collected. Like FIRPTA, money that was overpaid will be returned once the State of Hawai‘i tax return is filed.


All foreign buyers must obtain a Taxpayer Identification Number (TIN). Although this is not required when buying a Hawai‘i property, it will be required when you rent or resell it.


Some documentation in Hawai‘i real estate purchasing will require notarization by a US notary. You may even be required to do this at a US embassy if you are not in the US at the time of the purchase. If that is the case, make an appointment in advance.

Mahalo for reading Maui Now’s “What Canadians Must Know Before Buying a Maui Property.” What else do Canadian need to know before buying property on Maui? Let us know in the comment section below…

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