Master leasehold vs fee simple, lava zones, TMK system, catchment water, mandatory sea level rise disclosure, and the nation's highest conveyance tax—from Oahu to the Big Island.
Complex market dynamics unique to island living
Navigate lava zones, TMK system, and leasehold complexities
From $5K/acre on Big Island to $10M+ on Oahu. Expert training or instant cash offer—you choose.
Four main islands, four distinct markets—1000x price variation from Oahu to Big Island
$500K - $10M+/acre
Highest prices, leasehold common (Bishop Estate), urban/suburban demand, Honolulu market
$100K - $2M/acre
Premium resort areas (Wailea, Kapalua), upcountry ag land (Kula, Makawao), high demand
$5K - $100K/acre
Most affordable, lava zones critical, catchment systems, volcanic activity, massive variation
$150K - $1M+/acre
Limited inventory, wettest place on Earth (Mt. Waialeale), North Shore premium, exclusive
The most legally complex land market in America—no other state comes close
Progressive 0.10% to 0.72%—that's $72,000 on a $10M sale vs. $100 in Colorado!
25-30% of Hawaii properties are leasehold—you don't own the land, you lease it!
Zone 1-2 properties nearly uninsurable—40-70% less value than Zone 3+
Rainwater collection for all uses including drinking—common in rural areas
Hawaii's unique Tax Map Key parcel identification—different from mainland
2022 law—first state in nation to require mandatory sea level rise disclosure
25-30% of Hawaii properties are leasehold—the single most important distinction for sellers and buyers. Get this wrong and you'll lose deals or face lawsuits.
You own the land outright. This is normal mainland ownership.
You lease the land from owner (Bishop Estate, Kamehameha Schools, state, military).
A $500K leasehold condo in Waikiki might be $1.2M fee simple in the same building. Buyers who don't understand leasehold often walk away when they discover the truth. You MUST clearly disclose if your property is leasehold or you risk lawsuits.
Leasehold properties are harder to sell, but we buy them regularly. Get a cash offer and skip the buyer financing headaches.
Hawaii has the highest conveyance tax in the United States with a progressive rate structure. On a $10M sale, you'll pay $46,400 in conveyance tax compared to $100 in Colorado or Delaware!
| Sale Price Range | Tax Rate | Example Tax |
|---|---|---|
| $0 - $600,000 | 0.10% | $600 on $600K |
| $600,001 - $1,000,000 | 0.20% | $1,400 on $1M |
| $1,000,001 - $2,000,000 | 0.30% | $4,400 on $2M |
| $2,000,001 - $4,000,000 | 0.40% | $12,400 on $4M |
| $4,000,001 - $6,000,000 | 0.50% | $22,400 on $6M |
| $6,000,001 - $10,000,000 | 0.60% | $46,400 on $10M |
| Over $10,000,000 | 0.72% | $79,600 on $11M |
Seller typically pays conveyance tax in Hawaii (though it's negotiable). This is a massive difference from low-tax states. A $5M Oahu property costs $18,400 in conveyance tax—nearly 200x more than the same sale in Colorado ($100)!
When pricing your Hawaii land, remember conveyance tax eats into your net proceeds. On high-value properties, this can be $50K-$100K+!
The Big Island is divided into 9 USGS Lava Zones based on volcanic eruption probability. This is the MOST CRITICAL factor for Big Island land value—more important than acreage, view, or location.
Kilauea summit, active rift zones—25%+ chance of coverage. Nearly impossible to insure. Properties worth 60-70% less than Zone 3+.
Insurance: $15K-$25K/year IF available (most insurers won't touch it)
Lower East Rift, Puna—15-25% coverage chance. Very difficult/expensive insurance. 40-60% less value.
Insurance: $8K-$15K/year, limited carriers
Kona side of Mauna Loa/Hualalai—1-5% chance. Insurable but higher cost.
Insurance: $3K-$6K/year, standard carriers available
North Kohala, Hamakua, etc.—Less than 1% chance. Standard insurance available.
Insurance: $1K-$3K/year, all carriers available
Most lenders require lava flow insurance for mortgages on Big Island properties. Zone 1-2 properties often can't get insurance, which means buyers can't get financing, which means your buyer pool shrinks by 80-90%. This is why Zone 1-2 properties sell for 40-70% less than comparable Zone 3+ properties—not because they're less desirable, but because buyers can't get loans!
Hawaii law requires sellers to disclose USGS lava zone designation on Big Island properties. Check USGS Hawaiian Volcano Observatory or your county GIS map for your zone. Failing to disclose can result in lawsuits.
We regularly buy lava zone 1-2 properties that can't get traditional financing. Cash buyers don't need insurance—sell to us as-is.
In rural Hawaii—especially Big Island (Puna, Ka'u, South Kona) and rural Maui—many properties rely on rainwater catchment systems for ALL water needs, including drinking water. This is normal in Hawaii but foreign to mainland buyers.
Advantages:
Challenges:
Mainland buyers often balk at catchment water—"You mean I'll drink rainwater from the roof?!" This is a major objection you'll face. Solution: Educate buyers that catchment is normal in rural Hawaii, safe with proper filtration, and many residents prefer it to county water. Professional water testing reports help close deals.
You must disclose if your property uses catchment water and provide information about:
We specialize in rural Hawaii properties with catchment systems. Skip the buyer education process and sell to us directly.
Hawaii uses the Tax Map Key (TMK) system for property identification—different from mainland lot/block systems.
TMK Format: 3-1-5-022-035-0000
All property records, tax bills, deeds, and sales use TMK. You'll need your TMK for disclosure documents.
Hawaii uses CPR as an alternative to traditional subdivision—"condominiumizes" land instead of subdividing it.
Hawaii Revised Statutes § 508D-15 (effective May 2022) makes Hawaii the first state in the nation to require mandatory sea level rise disclosure for properties in exposure areas.
Rapid Ohia Death (fungal disease) killing native trees—must disclose if present on property
Coastal properties must disclose if in tsunami evacuation zone (all islands at risk)
Much of Hawaii is ag-zoned—limited ability to build dwellings without farm operation
State DLNR permits required (12-18 months)—very limited uses allowed
Navigate from surface to ocean floor—5 depth zones to successful sale
Gather Hawaii-specific documentation and determine your property's unique characteristics.
Complete mandatory Hawaii disclosure requirements (HRS Chapter 508D).
Price according to island, zone, and ownership type—target mainland/international buyers.
Negotiate conveyance tax, educate buyers on Hawaii's unique aspects.
Close through title company or attorney, pay conveyance tax, record deed with TMK.
Master Hawaii's complexity with our free course—or skip the stress and get an instant cash offer
Learn leasehold vs fee simple, lava zones, TMK system, conveyance tax, catchment water, mandatory disclosures, and more in our comprehensive free course.
Get a cash offer today. We buy leasehold, lava zone 1-2, catchment properties, agricultural land—as-is, any condition, any island.
This guide provides general information about selling land by owner in Hawaii and should not be construed as legal, tax, or professional real estate advice. Hawaii real estate law is complex, particularly regarding leasehold vs fee simple ownership, lava zone designations, TMK system, conveyance tax calculations, catchment water systems, mandatory disclosure requirements under Hawaii Revised Statutes Chapter 508D (including sea level rise disclosure per HRS § 508D-15), Rapid Ohia Death (ROD) disclosure, tsunami evacuation zones, agricultural zoning restrictions, conservation district permits, Condominium Property Regime (CPR) documentation, and other island-specific considerations. Property laws, tax rates, disclosure requirements, zoning regulations, and environmental considerations vary significantly by island, county, and parcel. Sellers are strongly advised to consult with a licensed Hawaii real estate attorney, qualified tax professional familiar with Hawaii conveyance tax and capital gains, and experienced local real estate professional before making any decisions. This information is provided "as is" without warranties of any kind. While we strive for accuracy, Hawaii laws and regulations change frequently, and we do not guarantee the completeness or currency of this information. Sellers are responsible for complying with all applicable federal, state, and county laws, including but not limited to HRS Chapter 508D mandatory disclosure requirements, conveyance tax payment obligations, TMK identification, and proper documentation of ownership type (fee simple or leasehold). Failure to properly disclose material facts about your Hawaii property may result in legal liability.