Is Rental Arbitrage Legal in Honolulu, HI?
Severely restricted. Honolulu allows short-term rentals only in resort-zoned areas, specific apartment-zone areas, and grandfathered properties with Nonconforming Use Certificates (NUCs). Most leased apartments in residential areas cannot be rented for short stays. Registered bed and breakfasts and transient vacation units are the only legal short-stay options in non-resort areas. Registration became available October 24, 2022, with no deadline. A December 2023 federal court ruling prevents enforcement of the 90-day minimum for existing 30–89 day rentals, but the policy may change.
Can a renter do rental arbitrage here? No. Renters cannot get a short-term rental license here. Only owners can host.
Requirements
- A short-term rental under 30 consecutive days is legal only in: resort-zoned properties, properties with Nonconforming Use Certificates (NUCs, pre-Oct 22, 1986), registered bed and breakfast homes, or registered transient vacation units (TVUs)
- Registration through HNL Build platform (registration available since October 24, 2022, no deadline)
- Each unit registers separately; renewal annually 3–1 months before expiration
- Zoning verification request: $300 (to confirm eligibility status)
- Advertisement must display STR registration license or NUC number and Tax Map Key (TMK)
- Bed and breakfast: owner or permanent resident must be present; max 2 rooms; max 2 adults per room
- Transient vacation unit: whole-home rental; max 2 adults per room
- Occupancy records required for NUC renewals
- $1 million liability insurance (from earlier ordinance; verify current requirement)
- State and city taxes; contact Hawaii Department of Taxation and City Department of Budget and Fiscal Services
Restrictions
- Short-term rentals (under 30 days) allowed only in resort-zoned areas (Ordinance 25-52) and specific apartment-zone areas
- Existing Nonconforming Use Certificates (pre-Oct 22, 1986 properties) must renew annually September 1–October 15; new NUCs are not being issued; NUCs are transferable if renewed before expiration
- Hotel and timeshare units exempt from registration
- Advertising residential rentals for under 30 days without proper registration is prohibited; penalties reported up to $5,000 per violation and potentially $10,000 per day
- Dec 2023 federal court ruling: cannot enforce 90-day minimum for existing 30–89 day rentals, but the policy may be appealed or modified
- Rental arbitrage in residential neighborhoods is prohibited; only resort, apartment-zone, NUC, B&B and TVU properties are legal
- Use STR Eligibility Map to verify property qualifies
- Contacts: Land Use Permits Division (808) 768-8015; STR Enforcement (808) 768-7887, 7:45 a.m.–4:30 p.m.
Taxes and Fees
- Hawaii transient accommodations tax: 11.00% (as of January 1, 2026)
- Hawaii general excise tax: 4%
- Oahu transient accommodations tax (county): varies
- Oahu general excise tax surcharge: 0.5% through 2030
- Total combined: approximately 15.5%–16.5%
Next Step
Legal is one half of the decision. The other half is whether the deal earns enough to be worth the risk.
Run the numbers for Honolulu, HI See the Honolulu, HI market
Sources
Frequently Asked Questions
- Can I Do Rental Arbitrage in Honolulu?
- Generally not outside resort areas. Honolulu requires a 90-day minimum stay in residential neighborhoods, so short stays in a leased apartment aren't allowed.
- Where Are Short Stays Still Legal?
- In resort-zoned properties, properties with nonconforming use certificates, registered bed and breakfasts and transient vacation units.
- What Are the Penalties?
- Reported fines are up to $5,000, and potentially $10,000 a day, for advertising residential rentals under 90 days.
- What State Taxes Apply?
- A 10.25% transient accommodations tax and general excise tax of 4% plus a 0.5% county surcharge.
- Could the Rule Change?
- Yes. A federal court blocked the 2022 version, and the 2025 rule may also be challenged. Check the city's current position before committing to a lease.