What Are the Real Costs of Buying a Home in Hawaii? (Beyond the Purchase Price)
By Nancy Beebe | Maui REALTOR® | Hawaii Life | 808-280-8579 | buyingandsellingmaui.com
The sticker price is just the beginning. Here's a complete breakdown of what to budget for when buying on Maui.
One of the most valuable things I can do for a buyer before they make an offer is give them a clear picture of what the purchase is actually going to cost — not just the listing price, but everything else that comes with it. Hawaii has some costs that don't exist on the mainland, and a few that are structured differently. Going in informed means no unpleasant surprises at the closing table.
Here's a complete, honest breakdown of what to budget for when buying property on Maui.
Closing Costs: Plan for 2–4% of the Purchase Price
Closing costs on a Hawaii real estate purchase typically run between 2% and 4% of the purchase price, depending on whether you're financing or paying cash, and whether you're buying a resale home or new construction. The major components include:
Title insurance: Protects you and your lender against any claims on the title. Required by lenders, highly recommended for cash buyers.
Escrow fees: The title/escrow company charges for managing the transaction. Typically split between buyer and seller, though this is negotiable.
Lender fees: If you're financing, your lender will charge origination fees, appraisal fees, and other processing costs. Get a Loan Estimate early so these don't surprise you.
Recording fees: The State of Hawaii charges fees to record the deed and mortgage with the Bureau of Conveyances.
Prepaid items: Homeowners insurance, property taxes, and mortgage interest may be collected upfront at closing to fund your escrow impound account.
Hawaii Conveyance Tax (State Transfer Tax)
Hawaii charges a conveyance tax — similar to a transfer tax on the mainland — on real estate sales. The rate is tiered based on the purchase price and goes up for higher-value properties. For most Maui purchases above $600,000, the rate is $0.70 per $100 of value or higher. This is typically paid by the seller, but it's worth understanding as it affects net proceeds in a sale and can come up in negotiations.
Property Taxes
Hawaii's property tax rates are actually among the lowest in the nation when measured as a percentage of value. However, there's an important distinction on Maui: the tax rate for owner-occupied properties (your primary residence) is significantly lower than the rate for non-owner-occupied properties — which includes vacation homes and investment properties.
If you plan to use your Maui property as a second home or rental, budget for the higher non-owner-occupied rate. I always make sure buyers know this upfront so it's factored into their financial planning.
HOA Fees and Special Assessments
Most condos on Maui come with homeowners association fees that cover building maintenance, common areas, insurance on the structure, and amenities. These range widely — from a few hundred dollars a month for smaller complexes to $1,500+ per month for luxury oceanfront communities.
Special assessments are one-time charges levied when a building needs a major repair or improvement that isn't covered by reserves. Before purchasing any condo, I always review the HOA financials to check the reserve fund health and look for any pending or anticipated assessments. A building with underfunded reserves is a yellow flag.
Hawaii General Excise Tax (GET) on New Construction
If you're purchasing a brand-new property or buying directly from a developer, the Hawaii General Excise Tax may be passed on to you as the buyer. This is effectively a sales tax that applies to certain transactions in Hawaii — something that doesn't exist in most mainland purchases. It's worth asking about upfront if you're considering new construction.
Homeowners Insurance and Flood Insurance
Homeowners insurance in Hawaii runs higher than the national average, reflecting the island environment and the risks associated with it. If your property is in a flood zone — common in certain areas of Maui — flood insurance is required by lenders and adds to your monthly costs. I always flag flood zone status early in the property search so buyers can factor this in.
The Bottom Line
For a $700,000 condo purchase with financing, a buyer should budget roughly $15,000–$25,000 in closing costs and prepaids, plus ongoing monthly costs including HOA fees, property taxes, insurance, and any lease rent if the property is leasehold. Going in with a clear picture of all these numbers makes the whole process smoother — and makes sure you're buying something that truly fits your financial life.
I put together detailed cost estimates for every buyer I work with before we write any offers. No guessing, no surprises.
📞 Want a real number breakdown for a property you're considering? Call Nancy: 808-280-8579 | [email protected] | buyingandsellingmaui.com
