What is the difference between Fee Simple (FS) and Leasehold (LH)?
Here are some terms that you may need to know while considering buying a property.
Leasehold (LH) A way of holding title to property. The lessor holds the Fee Simple (FS) interest and the lessee hold the leasehold interest. The leasehold interest is determined by the lease itself. It is important to know the following facts about a lease before you consider purchasing:
Term or time left on the lease. The longer the term, the more desireable.
Lease Rent: What you pay to the lessor monthly, semi-annually or annually.
Lease Period: A fixed period of determined lease rent.
Surrender Clause. Some leases are not renewable and have a surrender clause.
Fee Simple (FS) This is the way most of America owns property. You have a deed proving that you are a vested land owner. Here in Hawaii, most of the land is owned by huge estates which are remnants of the old Hawaiian monarchy. The Kingdom of Hawaii owned all of the land. Bernice Pauahi Bishop Estate, is the largest of these land owners. They own 341,546 acres or approximately 23% of all of the land
Is it possible to buy land in Hawaii?
#Hawaii, #Laws, #Real Estate, #News, www.Hawaii.Bio
Not long ago, land in Hawaii could not be privately owned by individuals, but rather was controlled by the moi (king) and his ali’i (high chiefs) through an organized land department or ahupuaa. However, King Kamehameha III’s Grand Mahele in 1848 paved the way for individuals to gain title to land and real estate in Hawaii. Today, land can be bought and sold in Hawaii – in certain areas and subject to Hawaii’s real estate laws and regulations. Let’s look at the stories of land ownership in Hawaii, from obtaining land rights in Hawaii today to ahupua in the past.
Who can buy land in Hawaii today?
Anyone in the world can buy real estate in Hawaii. However, if you are not a Hawaii resident, as defined by filing Hawaii state income taxes, then buying or selling land in Hawaii may have a few more complications.
If you are not a US citizen, you cannot use the property as your permanent residence unless you have a green card or visa. Non-US citizens may use the property as an investment or vacation home.
While anyone in the world can buy property in Hawaii, non-Hawaii residents will be subject to a tax of 7.25% of the sales price when and if they sell the property under the Hawaii Real Estate Tax Act or HARPTA. This 7.25% tax, along with the 15% federal tax for non-US citizens known as FIRPTA, will be automatically withheld at the time of escrow.
There are different tax forms and rules under both HARPTA and FIRPTA, so if you are not a Hawaii resident and want to sell your Hawaii property, it is recommended that you consult with an accountant.
Another challenge to purchasing real estate in Hawaii if you are not a US citizen is that financing can be difficult. A cash sale can of course be easily accomplished, but financing through a local lender or even a foreign lender can have its challenges as the documentation often differs from country to country.
Where can you buy land in Hawaii today?
Land in Hawaii is limited. Land with improvements or homes is limited, and undeveloped land is also limited. Today, where and what type of land you can buy in Hawaii depends largely on the zoning or purpose of the land.
Each of the Hawaiian Islands has different lands, as well as different zoning laws within the county. Here is a GIS map of all the islands of Hawaii with additional information about each of their zones.
The City and County of Honolulu, or the island of Oahu, has the following zoning, which includes land zoned for the following uses: conservation, agriculture, rural, residential, apartment, mixed-use apartment, resort, business, mixed-use business, and industrial. .
Where can you buy residential property on Oahu? This will be in most coastal cities such as Kailua, Kaneohe, Honolulu, Hawaii Kai, Kapolei and Waianae, as well as several developed cities inland of Oahu such as Mililani or Wahiawa.
If you’re looking for undeveloped land, there are only a few places on Oahu that have land left for sale:
Maunawili in Kailua has several large lots for high-end residential homes.
Mostly agricultural land is sold in Waimanalo.
There are several lots for sale in East Honolulu, including Hawaii Loa Ridge near Hawaii Kai.
Several large residential or agricultural sites can be found near Kaneohe, including the Auimanu and Kahalu’u areas.
On the North Shore there are many agricultural areas near Wailua as well as around Kahuku.
Some other islands, such as Hawaii Island, also known as the Big Island or Maui, have much more undeveloped land for sale – sometimes at relatively low prices by Hawaiian standards.
How to buy land in Hawaii?
Have you found a vacant lot for sale in Hawaii? If you don’t have the cash to purchase land outright in Hawaii, buyers usually need to get a loan for the vacant land.
The benefit of most land loans is that buyers typically only pay interest for the first few years. Typically, you will also need to secure a construction loan.
Once construction is completed, the land loan and construction loan can be converted to a conventional mortgage.
Disadvantages of a land loan include having to put down more money and having more difficulty getting a loan than other mortgages, such as a conventional loan.
When you buy land in Hawaii, offers are made with the same sales agreement as other real estate transactions involving single-family homes or condominiums. A land closing is also similar to a Hawaii home closing, except there will be no home inspections or termite reports.
Some real estate agents as well as mortgage brokers specialize in buying land in Hawaii, so we recommend consulting with one if you want to learn more.
Why buy land in Hawaii?
Buying undeveloped land in Hawaii may be the right option for some people, as there are many creative ways to use the land. Some people may dream of purchasing farmland to start a farming business. Please note that in Hawaii there may typically be a “farm dwelling” on agricultural land, which is defined by Hawaii Revised Statutes 205-4.5(a) as “a single-family dwelling located and used in connection with a farm…where agricultural activities provide income for the household, occupying residential premises.”
Some people may want to buy a piece of residential land to build their dream home. Building a custom home in Hawaii comes with a variety of costs. However, you can build a modular home, a tiny home, or even a storage container home. If you are purchasing residential land, be sure to ask questions about utilities, including water and electricity, and access to public roads. Some people dream of buying a piece of land in Hawaii so they can rent it out and make a lot of money.
Is it possible to do glamping in Hawaii?
Glamorous camping or glamping could be your entrepreneurial idea, and you could build yurts or fancy tents to rent out to tourists on sites like Airbnb.
However, keep in mind that Airbnb is controversial in Hawaii, with many new laws enacted on each island.
Most likely, any undeveloped land for sale will not qualify as a vacation rental site. Today, with time, anyone can buy land in Hawaii if they have the funds and can find the right property for sale. However, the idea of owning land in Hawaii was once unheard of.
What was land ownership like in Hawaii in the past?
No Land Ownership: Ahupua’a Land Office The idea of owning land did not occur to most Native Hawaiians as they had an organized system of land division that mostly took care of everyone’s housing and food.
Each island, or mokupuni, was divided into several smaller parts, or moku. On the island of Oahu, for example, there were six moku:
Ko’olauloa – North Shore today
Ko’olaupoko – Kaneohe, Kailua, Waimanalo, and Hawaii Kai today
Kona – Waikiki and Honolulu today’
Ewa – Ewa Beach and Waipahu today
Wai’anae – Waianae today
Wailua – Wailua today
Each moku was then divided into ahupuaa.
These were wedge-shaped pieces of land that stretched from the mountains to the sea and often followed natural boundaries such as rivers or mountain ranges. The name ahupua’a comes from two Hawaiian words for “pile” (ahu) and “pig” (pua’a), alluding to the fact that the boundaries of each division were marked by a pile of stones depicting a pig or an actual pig. , which will be given as a tax to the ruling chief.
Each ahupua’a was not the same size, as they were divided based on the resources available on that side of the island to ensure that the people living in that ahupua’a had everything they needed, from access to the ocean for fishing to fertile land. land to grow taro, sweet potatoes and other native plants for construction or food.
In Kona moku on Oahu, it included the following ahupua’a, whose names many cities and places still bear:
- Kuliuu
- Niu
- Vailupe
- Waialae
- Waikiki
- Honolulu
- Kapalama
- Kalihi
- Kahauiki
- Moanalua
Each ahupua’a was governed by an ali’i, or local chief, who was ultimately subordinate to the king. The ali’i used konohiki, or headmen/managers, who helped the ali’i manage land and fishing rights. Within the ahupuaa, the aliya also had two or three plots of land delegated to him, which were called ‘or. Mo’o were agricultural parts or.
In addition to the lands of the chief or ‘ili, within the ahupuaa there were even smaller plots of land called kuleana, which were used by the common people, or maka’ainana, to grow food. The size of the kuleana usually depended on the fertility and availability of land within the ahupua’a. Each Maka’ainan had a special craft, which was often passed down from generation to generation. The Maka’ainana were farmers, fishermen, housewives, weavers, canoe builders and other professions who worked together to meet the needs of all who lived in the ahupua’a. They bargained frequently to ensure that everyone had everything they needed.
Also, one of the roles of konohiki was to help distribute resources to everyone living in the ahupua’a. Another role of the konohiki was to collect taxes, which were often used to support the ali’i. Often the makaainana, konohiki, and alii respected each other; however, there are stories of Maka’ainana coming together to fight against Konohiki, or even Maka’a’ainana leaving ahupuaa to other ahupuaa that they felt were better regulated.
At this time, a person could not own land in Hawaii. However, land tenure was stable, people had a place to live in settlements, and resources were regulated for sustainable use so that everyone had what they needed. Hawaiians often had plenty of time for leisurely recreational activities such as surfing and martial arts, and time for arts such as kapa printing, quill embroidery, dancing and singing.
Change of land ownership:
Mahele 1848 After Kamehameha the Great unified the Hawaiian Islands through conquest in 1795 and after James Cook spread the word about Hawaii after his landing on the islands in 1778, which led to the arrival of missionaries and other foreigners – along with disease — Kamehameha III decided it was time for the Hawaiians to own the land.
Mahele Kamehameha III divided all the land in Hawaii among mo’i, ali’i, and government lands that were designated for maka’ainan. The mahele was a transaction that began on January 28, 1848 and ended on March 7, 1848. This redistribution of land is recorded in Buka Kakau Paa no ka mahele aina i Hooholia i waena o Kamehameha III a me Na Lii a me na Konohiki. ana, better known as the Book of Mahele.
Other acts and laws of the time further changed the status of land ownership in Hawaii. Under the Kuleana Act of 1850, commoners or maka’ainana could apply for title to the land on which they lived and hold it as common property. However, they must have lived on the land before 1839 to qualify. These land claims were resolved by 1854 with complex paperwork and a land registry. Because land ownership was a foreign idea, most Hawaiians did not claim the land, resulting in the remaining unclaimed lands being taken over by the government, some of which were later sold to today’s large Hawaiian landowners. At that time, only about 1 percent of the land in Hawaii went to the Maka’ainans, who made up the vast majority of the population.
Another important law paved the way for how land title exists in Hawaii today: the Resident Alien Act of July 10, 1850, which gave foreigners or non-Hawaiians the right to purchase land in fee simple, which meant that people from anywhere could buy and sell land. or pass it on to heirs.
Buying Land in Hawaii Today From the days of kings ruling over each island, to the Kingdom of Hawaii, to the Republic of Hawaii, to U.S. Territory, to statehood, land ownership in Hawaii has changed.
Native Hawaiians once did not even consider land ownership a necessity, as they enjoyed sustainable use and sharing of land within an organized and prosperous ahupua system.
However, the controversial history of Mahele, or land distribution, and the later overthrow of the Kingdom of Hawaii meant that people from all over the world were able to buy land in Hawaii at a simple price.
Today , if you have the necessary resources and perhaps a little luck, you can buy a plot of land in Hawaiian paradise.