PCSing out: sell the house or become a landlord?

The HARPTA facts, straight

HARPTA is Hawaii's withholding law on sales of Hawaii real property — a 7.25% withholding on the amount realized, per the Hawaii Department of Taxation. It's withholding against potential tax, not the tax itself; refunds of over-withholding run through state filings. The part that trips up military sellers: being a Hawaii resident does not switch it off by itself. The Department names that as a common misperception — HARPTA applies even when the seller is a resident, and the buyer must withhold unless the seller gives the buyer Form N-289 certifying an exemption. Residency for this purpose is a tax status determined by domicile and the purpose of your presence in the State, so keeping a mainland state of legal residence doesn't resolve it in either direction on its own. Timing your sale against your residency status and the N-288B filing deadline is a real-money question for a tax professional, not a listing agent — the mechanics are laid out in the full HARPTA guide.

Rent-vs-sell, on one napkin

The accidental-landlord math has five lines. Run them before any emotional attachment votes:

The case for keeping it: Oahu's chronic supply constraint, a tenant pool refreshed by every PCS cycle, and a mortgage possibly priced below today's rates. The case for selling: concentrated single-island risk, the management drag from overseas, and — if it's been your primary residence — the federal capital-gains exclusion window (with special extensions for qualifying military moves; confirm your dates with a tax professional before deciding).

If you sell with a VA loan on the house

Selling pays off the loan and starts the path to restoring your entitlement for the next duty station — file the restoration paperwork; it isn't automatic. If your buyer is also VA, your loan may be assumable at its existing rate, which in a high-rate year can be worth real money in your sale terms; assumption releases your entitlement only if the assuming buyer substitutes their own. Know both facts before negotiating.

Orders pointing off-island?

Join the list for the seller-side brief: market medians as they move, HARPTA and residency notes, and first access when full service opens.

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