Thanks for the information, I will promptly ask if their Escrow company complies under the new law. I don't think Im sending the money to the seller. I haven't seen the invoice yet.
Be careful. As a Canadian citizen you will be subject to FIRPTA and HARPTA if/when you sell. US and Hawaii tax returns must be filed to retrieve the withholding.
Nothing new about that. But, the new Hawaii escrow law was, in part, put in place to insure that Hawaii taxes were paid. When you sell they will match the original purchase data with the sale info to verify the validity of the refund.
If your purchase was not escrowed in Hawaii, the fine is $5,000.
Of course, the other reason for the new law is to feed Hawaii-based title/escrow companies. They are taxed on their business revenues.
Some mainland closing agents are (for now) simply ignoring the Hawaii law. As Hawaii regulators get up to speed on their audit activities of these transactions, the dung will hit the fan. The violating closing agents will be fined the $5,000,
per transaction.
You do not want to have an open escrow with such a closing agent if/when that happens.
To be clear, I am not saying that your closing agent is violating the current Hawaii law. Just be aware of the potential complications.
