Hawaii Form P-64B: Conveyance Tax Exemption for Inherited Property

When an executor transfers Hawaii real property to heirs or beneficiaries after a death, there is a tax most people do not know to look for: the Hawaii conveyance tax. It applies to real property transfers and is ordinarily due at closing. But qualifying estate transfers to heirs may be exempt — and claiming an available exemption requires submitting the right form when the instructions require one.

That form is Form P-64B.

What Is the Hawaii Conveyance Tax?

Hawaii imposes a conveyance tax on instruments conveying real property — deeds, assignments of leases, easements, and similar documents — unless a specific exemption applies. The tax is assessed on the actual and full consideration, and the DOTAX instructions state that it applies whether or not the document is recorded.

For a market-rate sale, the conveyance tax is straightforward: the buyer and seller handle it through escrow. But estate transfers to heirs are not market-rate sales. The beneficiary is not buying the property; they are receiving it as an inheritance. Hawaii may provide an exemption for qualifying estate transfers — but claiming it is not automatic. The executor must use Form P-64B when the applicable instructions require it, to claim the Exemption from Conveyance Tax.

What Form P-64B Does

Form P-64B is the "Exemption from Conveyance Tax" form. It declares the basis for claiming that a particular property transfer is exempt from Hawaii's conveyance tax. For estate and inheritance transfers, the applicable exemption is typically the one covering transfers made to confirm or complete a title where no additional consideration passes beyond the inheritance.

When a transfer requires Form P-64B, the completed form is submitted through the applicable DOTAX approval or recording process, with the deed or other conveyance instrument as required. Without a properly completed exemption form where one is required, the exemption claim may not be accepted and conveyance tax may be assessed.

Who Needs to File P-64B

Form P-64B is generally used when a Hawaii real property transfer is claimed as exempt from conveyance tax, but the current instructions list transactions for which it is not required. In the estate context, this typically applies when:

• The executor records a deed transferring real property from the estate to a named beneficiary under a will
• A surviving joint tenant records an affidavit confirming their ownership after the other joint tenant's death
• A trustee transfers property out of a revocable living trust to a trust beneficiary after the settlor's death
• A surviving spouse receives the family home as part of the estate distribution

When the transfer qualifies for the claimed exemption, it is not a taxable sale — it is a legal redistribution of ownership following a death. Form P-64B is how you document that exemption when the form is required.

Regular System vs. Land Court: Where P-64B Gets Filed

Hawaii operates two concurrent recording systems, and this distinction matters for how and where you file.

Regular System (Bureau of Conveyances): Property recorded in the Regular System carries a stamp reading "Bureau of Conveyances." For Regular System transfers, submit the deed (or other conveyance instrument) and, when required, Form P-64B through the applicable route: some exemption categories require DOTAX prior approval before Bureau filing, while others are filed directly with the Bureau. The recording fee for a document up to 50 pages is $41.00.

Land Court (Office of the Assistant Registrar): Property registered in the Land Court Torrens system carries a stamp reading "Office of the Assistant Registrar." Land Court property uses a separate process — a petition to the Land Court to note the death and issue a new Certificate of Title. If Form P-64B is required, follow its applicable approval route before or with the Land Court process rather than using the standard Bureau of Conveyances window. The recording fee for Land Court documents is $36.00.

If you are unsure which system your property is in, check the existing deed. The system is identified by the stamp or registration notation on the document. This step is critical: filing in the wrong system does not just delay the transfer — for Land Court property, it can render the transfer void.

How to Determine the Applicable Exemption

Form P-64B lists several categories of exemptions. The executor must select the category that matches the actual transfer facts and provide a brief explanation of the basis for the exemption; do not assume that every inheritance transfer follows the same category.

If the Department of Taxation flags the exemption claim for review, they may require documentation — typically a copy of the will, the letters testamentary, and evidence that the transfer is being made to a named beneficiary or legal heir. Keeping these documents organized before filing saves time if a review occurs.

The M-6A Release and Conveyance: Two Separate Requirements

One confusion that often derails estate property transfers: the Form P-64B conveyance tax exemption and the Form M-6A estate tax release are two separate documents with different purposes.

Form P-64B addresses the conveyance tax — the tax on the act of transferring property.

Form M-6A (Request for Release) is a sworn statement filed with the Hawaii Department of Taxation declaring that no estate taxes are due, or that any estate taxes owed have been paid. The DOTAX issues a release that clears the automatic state estate tax lien from the real property.

Title insurance companies require the M-6A release before they will underwrite any sale or refinancing of inherited Hawaii real estate — regardless of whether the estate owes any estate tax. Even if the estate is well below the $5,490,000 exemption threshold, the executor still needs to file M-6A to obtain the lien release.

The sequence matters: the executor files Form M-6 first when required, pays any estate tax due, waits the applicable period before filing M-6A, obtains the release from DOTAX, and then records the transfer deed through the appropriate recording process, following the applicable P-64B route when that form is required.

Common Mistakes with Form P-64B

Skipping P-64B entirely. Some executors assume that because the transfer is clearly an inheritance — not a sale — no tax forms are needed. Confirm whether the transfer requires P-64B or falls within one of the current instructions' exceptions before filing.

Filing P-64B in the wrong system. A P-64B attached to a deed filed in the Regular System does nothing for a property actually registered in Land Court. Identify the system before you prepare any filing.

Confusing P-64B with P-64A. Form P-64A is the conveyance tax return — filed when a taxable conveyance occurs and tax is owed. Form P-64B is the exemption claim used for qualifying transfers when required. Many estate transfers use P-64B, but confirm the applicable instruction category.

Neglecting the M-6A before attempting to convey. If a title company is involved — as it typically is when the beneficiary wants to sell or refinance the inherited property — they will require the M-6A release before completing any transaction. Submitting P-64B without first obtaining M-6A clearance will stall the closing.

Practical Filing Checklist for Estate Property Transfers

Before recording any estate property transfer through the appropriate recording process:

1. Identify whether the property is Regular System or Land Court
2. Obtain certified letters testamentary (or equivalent authority to act as executor)
3. File Form M-6 or confirm an M-6A filing is ready — obtain the estate tax lien release from DOTAX
4. Prepare the transfer deed (or Land Court petition)
5. Complete Form P-64B, marking the applicable exemption category
6. Submit the deed and, when required, P-64B through the appropriate DOTAX approval and recording-office or Land Court process, along with the recording fee ($41 Regular System, $36 Land Court)

For inter-island properties — Maui, Hawaii Island, Kauai — remember that the Bureau of Conveyances is located in Honolulu on Oahu. All recording must physically reach that office. Factor in courier or mail time for original documents.

If you are working through the full estate administration process in Hawaii — including all DOTAX filings, property transfers, and tax clearances — the Hawaii Final Tax & Estate Tax Guide provides a sequenced, step-by-step walkthrough of every form and deadline involved.

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