3 Misconceptions About Buying Property on Oahu

I got a call this past week from a Buyer in Ohio on a listing of mine. She’s thinking about relocating her family here, however, in spending a good half hour on the phone with her, there were a handful of misconceptions she heard about buying property here. Some of which I’ve heard and some I heard for the first time.

Vacant lot zoned P-1 (Conservation) I have listed (MLS# 201600938) listed for $590,000

Here’s a summary of 3 that were brought up:

1. You Have to be From Hawaii to Own Land in Hawaii – False

If I had a dollar for every time I heard that, I’d be….rich! The truth is anyone can purchase Fee Simple property in Hawaii (as long as they can afford it). I think the misconception stems from what people have heard over the years regarding Leasehold property (where you don’t own the land – only the improvements) or past inquiries on DHHL (Department of Hawaiian Home Lands) properties. Those properties are also leasehold. However, unlike typical leasehold properties where anyone can buy the improvements, DHHL Leasehold properties and resales listed in MLS are only eligible for those with a certain % of Hawaiian ancestry. The good news is 90% of the properties listed today are Fee Simple! You can also filter on our website to eliminate Leasehold listings.

As you can see, the majority of the properties for sale are Fee Simple

2. If You’re Not From Hawaii, You Have to Pay Higher Property Taxes Than Everyone Else – False*

Up until recently, everyone paid the same rate for residential property tax on Oahu. Whether you were born and raised here, moved here from the mainland, or lived in Japan, we all paid the same rate. What has changed recently is the rate for non-owner occupants on properties with assessed values of more than $1 million. This is the City and County of Honolulu’s new Residential A Classification.

Up until this point, we’ve had some of the lowest property taxes in the country, which I’ve written about in the past. We still do. Even though Residential A takes the rate from .35% to .6% for non-owner occupants, it’s still lower than a lot of other places! In addition, let me remind you it’s for non-owner occupants. For instance, if someone is Hawaiian, born and raised here, and they own an investment property worth more than $1 mil, they’ll pay the higher tax rate just like someone from the mainland or a foreign country.

*Although I sell property for a living in Hawaii, I always recommend you consult your CPA or Tax Advisor for tax advice 🙂

3. Honolulu is An Un-Healthy Place with Too Many Smokers – False

I beg to differ on this one. It’s quite the contrary. Hawaii is always ranked near the top of the country for healthy living and lifestyle. Here’s an article a colleague wrote about how we were ranked #1 in the country for well being. If you read the article, we’re also known for our low smoking rate. Hawaii leads the country on several smoking fronts. We’re also the first in the nation to raise the minimum age to 21.

Hawaii definitely isn’t known for too much smoking. Not your typical scene…

Not only are you not allowed to smoke indoors in public places, you can’t smoke within a certain vicinity of entryways to buildings. Once I explained this to the Buyer from Ohio, she said, “Ah – that makes sense! All the people I saw smoking were on the sidewalks in Downtown Honolulu.” They weren’t allowed to smoke indoors or near the entry, so they went to the street as that was the only “allowable” place nearby.

Get the Real Story from a Realtor on the Ground on Oahu

Instead of hearing rumors or misreading something online, you need to speak with a Realtor on the ground to find out the real story. Having been born and raised here, I’ve heard all kinds of misconceptions over the years…Believe it or not, there’s still people on the mainland that don’t know we’re part of the United States! I remember traveling in high school and meeting a number of people that literally thought we still live in grass shacks!

When you’re considering purchasing a property on Oahu, feel free to contact me for more information to get the real story of what’s happening on the ground and put the misconceptions to rest.