Understanding Hawaii Tax Sales: A Comprehensive Guide

Sales Type: Redeemable Deeds
Frequency: Annual
Interest Rate: 12%
Penalty: 12%
Redemption Period: 1 Year
Bid Method: Premium Bid, Sealed Bid

Understanding Hawaii Tax Sales: A Comrehensive Guide

Tax sales offer a unique opportunity for investors to acquire real property at potentially favorable prices, but navigating the process requires a thorough understanding of the procedures involved. For those interested in participating in tax sales in Hawaii, here’s a detailed breakdown of the key information you need to know.

Date, Time, and Location

The date, time, and location of tax sales in Hawaii are subject to change with each sale and are typically made public four weeks prior to the sale. Interested parties should keep an eye on official announcements through reputable sources like the Hawaii Tribune Herald, Honolulu Star-Advertiser, and West Hawaii Today. Additionally, information is available on the official website of the Hawaii Property Tax Division (www.hawaiipropertytax.com) under the “Tax Sales” section.

Advertising and Registration

Sales are advertised in local newspapers and on the official website mentioned above. The first printing typically occurs four weeks prior to the sale, with subsequent weekly updates. Unlike some other jurisdictions, there is no registration required for the live public auction in Hawaii.

Payment Requirements

Accepted forms of payment include cashier’s checks, money orders, travelers checks, or cash. Personal checks and credit cards are not accepted. It’s advisable to come prepared with a cashier’s check payable to yourself for the maximum amount you intend to bid. Payment in full is required immediately following a successful bid, and participants must have the full payment available at the time of the sale.

Types of Documents Issued

Upon a successful bid, the County will draw up and record a tax deed in the purchaser’s name. This deed is similar to a quitclaim deed and is passed on “as is,” with no warranties from the County to the purchaser.

Redemption Period

Following the sale, there is a redemption period of one year during which the prior owner may reclaim the property by paying the sale price plus 1% per month interest. The County is not involved in the redemption process, and it’s essential for purchasers to be aware of their rights and responsibilities during this period.

Investor Considerations

Investors should be cautious about building on the property during the redemption period, as the prior owner is not obligated to compensate for any improvements made. Additionally, selling or transferring the property during this time requires careful consideration and communication with the buyer regarding the redemption provision.

Interest Rates and Absentee Bidding

Investors should note that the annual interest rate on redeemed properties is 12%. Absentee bidding is not permitted, but representatives may bid on behalf of investors with appropriate documentation.

Clearing Liens and Title Issues

While the County endeavors to provide a free and clear title, purchasers may still be required to clear recorded liens independently. The County provides some assistance in this matter, but it’s advisable for purchasers to seek legal counsel if title disputes arise.

Conclusion

Participating in tax sales in Hawaii can be a lucrative investment opportunity, but it requires careful research, preparation, and understanding of the procedures involved. By familiarizing themselves with the process outlined above, investors can navigate tax sales with confidence and maximize their chances of success.

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