What to Know About Hawaii Short Term Rental Laws

Hawaii’s short-term rental landscape is undergoing significant changes. Whether you’re a seasoned host or considering entering the market, understanding the evolving legal framework is crucial. This guide provides an overview of Hawaii’s short-term rental laws, focusing on registration, zoning, taxes, and safety requirements.

Understanding Hawaii’s Short-Term Rental Regulations

Senate Bill 2919: Empowering Counties

In May 2024, Governor Josh Green signed Senate Bill 2919 into law, granting counties enhanced authority to regulate short-term rentals. Key provisions include:

• Zoning Authority: Counties can now regulate the “time, place, manner, and duration” of land uses, including transient accommodations. This allows for more localized control over short-term rental operations.
• Phase-Out Provisions: Counties have the power to phase out short-term rentals in residential and agricultural zones through zoning regulations, aiming to address housing shortages and community concerns.
• Operational Duration: The law permits transient accommodations for up to 180 consecutive days, providing flexibility for short-term rental operations.

These changes empower counties to tailor regulations to their specific needs, leading to a more diverse regulatory environment across the state.

County-Specific Regulations

Honolulu (Oahu)

• Zoning Restrictions: Short-term rentals are permitted only in resort-zoned areas. Properties outside these zones are prohibited from operating as short-term rentals.
• Registration Requirements: Owners must register each unit intended for short-term rental use. Existing Non-Conforming Use Certificates (NUCs) holders must renew their NUCs annually between September 1 and October 15.
• Local Contact: A local contact person must be available 24/7 to address guest issues and complaints.

Maui County

• Phase-Out Plan: Maui County has introduced legislation to phase out approximately 7,000 short-term rentals in apartment-zoned areas by January 1, 2026, to address housing shortages.
• Minatoya List: Properties on the “Minatoya List,” established in 2001, are being scrutinized for compliance with current regulations.
• Permit Limitations: The county has set a cap on the number of short-term rental permits issued, with only 1,700 permits available on Oahu.

Hawaii County (Big Island)

• Quiet Hours: Quiet hours are enforced from 9 pm to 8 am, and these must be displayed on the property and included in rental agreements.
• Parking Regulations: Guest vehicles must be parked in designated onsite parking areas to comply with local regulations.
• Local Contact: A local contact person residing on the same island must be available 24/7 to address guest issues.

Tax Obligations for Short-Term Rentals

Hawaii imposes several taxes on short-term rental operations:

• State Transient Accommodations Tax (TAT): Currently set at 10.25% of gross rental income.
• County TAT: Varies by county; for example, Honolulu County adds a 0.5% surcharge, bringing the total to 10.75%.
• General Excise Tax (GET): A business tax assessed at 4% on most goods and services, including short-term rentals. Some counties, like Honolulu, add a 0.5% surcharge.
• Property Taxes: Vary by county; properties used as vacation rentals are typically taxed at higher rates than owner-occupied or long-term rental properties.

Hosts are responsible for registering with the Hawaii Department of Taxation and filing tax returns regularly. Unlike many other states, Hawaii does not allow booking platforms like Airbnb and Vrbo to collect and remit these taxes on behalf of hosts.

Safety and Operational Standards

To ensure guest safety and compliance, short-term rental owners must adhere to local health and safety regulations:

• Fire Safety: Properties must have working smoke detectors, fire extinguishers, and clear evacuation plans.
• Sanitation: Rental properties must meet local health department standards, ensuring that all areas are clean and free from hazards.
• Building and Housing Standards: Compliance with local building codes and housing standards is required to ensure habitability and safety.
• Insurance Considerations: Hosts should have liability insurance to protect against potential legal claims and property insurance to cover damages to the dwelling unit.

Compliance Tips for Hosts

To navigate Hawaii’s short-term rental laws effectively:

• Stay Informed: Regularly check county websites and the Hawaii Department of Taxation for updates on regulations and tax requirements.
• Engage with Local Authorities: Participate in community meetings and engage with local officials to stay informed about potential changes in regulations.
• Maintain Proper Documentation: Keep records of all registrations, permits, and tax filings to ensure compliance and facilitate renewals.
• Implement Safety Measures: Ensure your property meets all health and safety standards to protect guests and avoid penalties.

Hawaii’s short-term rental laws are designed to balance the interests of property owners, guests, and local communities. By understanding and adhering to these regulations, hosts can operate legally and contribute to the state’s efforts to address housing challenges and promote sustainable tourism. For more information on short-term rental regulations in Hawaii, visit the Hawaii Department of Taxation website or your respective county’s planning and permitting department.