Is Rental Arbitrage Legal in Hawaii?
Counties, not the state, set short-term rental rules. Each of Hawaii's four counties (Honolulu/Oahu, Hawaii/Big Island, Maui, Kauai) has distinct rules on where STRs are allowed, permits, and restrictions. Honolulu has the strictest rules, limiting rentals to resort and specific apartment zones. Maui has a moratorium on new TVR and STRH permits outside hotel districts. Hawaii County and Kauai allow STRs in more zones but require annual permits and a 24/7 local contact. The state collects a transient accommodations tax (11% as of January 1, 2026) and general excise tax on all rentals.
Requirements
- State-level taxes: register for the transient accommodations tax (TAT) Certificate ($5 for 1-5 units, $15 for 6+ units, one-time fee) and general excise tax (GET) licence ($20, one-time)
- County-level: check the specific county's permit/licence requirements for where the property is located
- Honolulu County: $1,000 initial STR registration fee, annual renewal, only in resort zones and specific apartment zones
- Hawaii County (Big Island): Bill 108 (2018, Ordinance 2018-114); permit or Nonconforming Use Certificate for pre-2018 properties; requires 24/7 local contact
- Maui County: Moratorium on new TVR and STRH permits (Ordinance No. 5473); only B&B and existing licensed rentals
- Kauai County: TVR Certificate for Visitor Destination Areas; Nonconforming Use Certificate for pre-2023 properties; requires 24/7 local contact
- TAT identification number in all advertisements
- Proof of $1 million liability insurance (typically)
- Safety inspections
Restrictions
- County-based system; rules vary significantly by island
- Honolulu (Oahu): Rentals only in resort zones and specific apartment-zoned areas; 2 adults per bedroom maximum; nonconforming use certificates (pre-Oct 22, 1986 properties) only, no new ones issued; Dec 2023 court ruling prevents enforcement of 90-day minimum for 30-89 day rentals
- Hawaii County (Big Island): Not allowed in single-family residential and agricultural zones; allowed in hotel, resort, commercial and multi-family zones; Good Neighbor Policy (quiet hours 9pm-8am); annual permit renewal
- Maui: Moratorium on new rentals outside hotel districts; existing B&B and STRH permits only with district caps; 5-year ownership period and owner-occupied typically required; phasing out residential STRs
- Kauai: Only in Visitor Destination Areas for new permits; grandfathered Nonconforming Use Certificates outside VDAs with annual renewal; Homestays (owner-occupied, max 3 rooms) have different rules
- Operating without permit: $1,000 or more per day; TAT number missing in ads: $500 per day first violation, $1,000 per day subsequent
Taxes and Fees
- State transient accommodations tax (TAT): 11.00% as of January 1, 2026 (for stays under 180 days)
- County transient accommodations tax: 3% (all counties)
- General excise tax (GET): 4%
- County GET surcharge: 0.5% (Honolulu, Hawaii, Kauai, Maui counties through 2030)
- Property tax: Higher rates for vacation rental properties vs. residential
- Total combined: approximately 18-19% depending on county
Cities in Hawaii
Next Step
Legal is one half of the decision. The other half is whether the deal earns enough to be worth the risk.
Sources
Frequently Asked Questions
- Who Sets Short-Term Rental Rules in Hawaii?
- Counties. Honolulu County (Oahu) has the strictest rules of the cities on this site, with a 90-day minimum stay in residential areas.
- What State Taxes Apply?
- A 10.25% transient accommodations tax on stays under 180 days, plus 4% general excise tax and a 0.5% county surcharge.