The REIT Way Hawaii
REITs, or Real Estate Investment Trusts, have been active in Hawaii for decades. Created by Congress in 1960, REITs are modeled after mutual funds and allow every person in Hawaii and across the country to invest in valuable real estate including workforce/affordable housing like the Moanalua Hillside apartments and Kapolei Lofts, Ala Moana Center; Pearlridge Center and the Wet’n’Wild theme park, along with the Hale Pawaa healthcare building, hotels, offices and other buildings in Hawaii.
REIT Basics – Hawaii
In Hawaii, there are more than 80 REIT-owned properties with investments currently worth more than an estimated $11.3 billion.1
How are REITs and their shareholders taxed in Hawaii?
REITs are required to distribute all of their income to shareholders as taxable dividends. If a company doing business in Hawaii qualifies as a REIT, the REIT generally pays federal and Hawaii corporate income tax to the extent it does not distribute its income. REIT shareholders in Hawaii must pay Hawaii income tax on the dividends they receive even from REITs that don’t do business in Hawaii. Of course, REITs and their tenants must pay general excise taxes (GET) and property taxes like other businesses.