Important Factors to know when considering an 
STVR on Big Island (Hawaii County)
STVRs must be registered and permitted through Hawaii County. There are many factors to understand when considering a home as a vacation rental in Hawaii:
- Zoning – Is the home/condo in an allowable zone (STVR permit still applies) or is the home/condo already permitted with a non-conforming use permit?
- HOA rules – what do the Covenants, Codes, and Restrictions (CC&Rs) say about short rentals?
- Taxes – renting your home, even if you live there, means your home will be taxed at a higher rate than a primary home and there are taxes on the rental income.
- Hosted or Unhosted – Will you live on property (hosted) or not (unhosted). The regulations are different.
- Management – If you live off island you must have a property manager on island. There are many options in companies and offerings and costs.
- Expenses for preparation and upkeep. Is the home furnished and ready? What does it need to be ready to rent? Do you have reserves for the unexpected – from the coffee make to the AC, something may go wrong during or between guest stays.
- Revenue – Consider the cost of the home (mortgage and insurance), preparation, management, taxes, HOA dues, utilities, and maintenance. Do you need the rental to make a profit, or cover all of your cost of ownership and management, or just offset your costs? This may influence your budget as you shop for a home.
How do I know if a home/condo can be an STVR?
Is the home currently an STVR or has it been previously? There are only about 750 homes on the entire island that have a non-conforming (NUC) STVR permit. The permit follows the home as long as the new owner changes the permit to their name within 90 days of purchasing. If the NUC is not renewed, for any reason, it can never be renewed. Non-conforming permits are no longer issued (since 2018), so as NUC permits are not renewed they will become more rare. This means having an NUC STVR permit will come at premium when a home goes on the market.
Most STVRs on island are condominiums. Zoning and HOA factors apply to condos as well. There are many condos (and some homes) zoned for STVR. It is important to check the HOA rules for condos as well, even when zoned for STVR.
Prior to December 2018, all properties could be rented as a STVR, no matter the zoning or having an owner on the property with guests. In fact, the Big Island of Hawaii was the last island in the state to tighten up STVR regulations.
Zoning – Here are the allowable zones
- V, CG, and CV zoning districts Hawaii County zoning districts
- Residential and commercial zoning districts, situated in the General Plan Resort and Resort Node areas
- RM zoning district, for multiple family dwellings within a condominium property regime as defined and governed by chapters 514A or 514B, Hawaii Revised Statutes.
- Any property that is in a zone that begins with a V for vacation is generally allowed to either continue with current STVR that is in place or apply for a new STVR. STVR’s that are in place can be transferred to a new owner as long as the current owner is up to date on all fees and filings. Most Condominiums located in Resort Properties fall into this category. However, Condominiums not located in a Resort Property vary from one location to the next.
- Short-term vacation rental are not allowed single-family residential zone or agricultural zone. The exception is if you live on property. This is called a hosted rental. You can rent out a portion of your home, or an ADU (additional dwelling unit). As of now this does not require a permit. It is still subject to taxes. If you have a hosted rental you no longer qualify for the lower homeowner tax rate.
Homeowner Association (HOA) rules
- Some condo complexes and communities restrict or forbid short term rentals, even in proper zoning. When home shopping, check with your real estate agent to find out what the HOA / Covenants, Codes, and Restrictions (CC&Rs) say about short term rentals? Are they allowed? Are there minimum night stay rules? Is there on site management? If it’s your primary home can you rent out a portion of your home short term?
Taxes for Short Term Rentals in Hawaii County
- When considering owning it is important to understand the management and expenses as well as the taxes.
- Hawaii does not have a sales tax; instead, we have the GET (General Excise Tax), which is assessed on all business activities (sales of products and all services). There is also HCTAT (Hawaii County Transient Accommodation Tax) and TAT at the state level. Businesses and property owners can legally pass these taxes directly to the consumer. This is typically done by itemizing these taxes separately on invoices, rental agreements, or receipts, allowing the business to recover the cost of the taxes without it affecting their profit margins.
- We are not tax advisors. Please confirm all tax rates on county sites.
Transient Accommodation Tax / TAT
- A “transient accommodation” is a room, apartment, house, condominium, beach house, hotel room or suite, or similar living accommodation furnished to a transient person for less than 180 consecutive days. “Gross rental or gross rental proceeds” includes amounts paid to you in the form of cash, goods, or services as compensation for furnishing a transient accommodation without any deductions for costs incurred in the operation of the transient accommodation.
- This tax is at the state level which is currently levied and a rate of 10.25% on every taxpayer that has taxable gross rental proceeds and/or total fair market rental value.
Hawaii County Transient Accomodation Tax / HCTAT is an additional county level percentage of 3% for every taxpayer that has taxable gross rental proceeds and/or total fair market rental value attributable to the County of Hawai’i.
- HCTAT payments are due concurrent with the State TAT returns and payments. For periodic returns, taxpayers are required to file Form TA-1 on a monthly, quarterly, or semi-annual basis.
- Hawaii does not have a sales tax; instead, we have the GET, which is assessed on all business activities. The state tax is 4% and the County of Hawaii adds a surcharge making the total tax 4.7120%.
- Renting your home, even if you live there, affects your property tax rate. Your primary home has a lower tax rate of $5.95 per $1000. Renting your home changes your tax rate to the Residential rate of $11.10 per $1000 for the portion valued less than $2 million and $13.60 per $1000 for the portion valued at $2 million and more.
Management
- If you do not live on the island you are required to have on island management for your rental. This is someone who oversees the property and acts as an on island contact for guests. The scope of options ranges from large companies that offer extended services, like full linen supply, and have full staffing. There are also companies and individuals that offer different levels of services from basic to mid-range services. This can range anywhere from 20%-30% of revenue. There are some that offer very minimal services for a flat fees; for example if you choose to manage your own bookings and cleaners, you may just need someone to check on the home between guests, be a contact for guests should they need anything during their stay, and be on call to handle emergencies or urgent issues that might arise during a guest’s stay, such as plumbing issues, power outages, or other unexpected events. This level of service may be available for a flat fee.
- In deciding on management it is important to consider your budget, your level of involvement, the level of service you plan to provide, and is all of that in line with the home and community you desire. For example if you are in a luxury community charging a premium price you will want to invest in management that offers that level of service.
- How much do you want to work on your STVR? Do you want to set it and forget it? Do you want to manage bookings, reviews, vendors, repairs, supplies? These are all considerations to discuss with your agent as you determine the best fit for management.
- Talk with your real estate agent about requirements and recommendations for management.
Here are the proposed changes to current STVR regulations
- There are current proposed changes including changing the name to TAR (Transient Accommodation Rental).
- Talk with your real estate agent about the proposed changes. If you are considering an STVR in Hawaii you will need to know what could change and how those changes will affect your plans and your investment.
Additional STVR Info
Hawaii County STVR (Short-Term Vacation Rental) laws refer to regulations that govern the use and operation of vacation rentals in Hawaii County, which includes the islands of Hawaii, also known as the Big Island. The purpose of these laws is to balance the interests of homeowners who wish to rent out their properties to tourists with the needs of local residents and the community.
In general, Hawaii County STVR laws require property owners who wish to rent out their homes or condos to tourists for periods of less than 30 days to obtain a permit or a registration certificate from the County. The process of obtaining a permit or certificate involves submitting an application, paying a fee, and meeting certain requirements related to safety, health, zoning, and taxation.
The specific regulations governing STVRs in Hawaii County vary depending on the location and type of property. For example, different rules may apply to properties in residential areas, commercial areas, or resort areas. Additionally, there may be restrictions on the number of guests, parking, noise, and advertising.
It is important for property owners to comply with Hawaii County STVR laws to avoid fines and penalties, and to be respectful of the local community. It is also recommended to consult with a lawyer or a professional in the field to ensure full compliance with all regulations and requirements.
In Hawaii County, a hosted STVR refers to a short-term vacation rental where the owner or a representative of the owner is physically present on the property during the guests’ stay. Hosted STVRs are subject to different regulations compared to unhosted STVRs.
Under Hawaii County law, a hosted STVR is defined as a rental of a room or rooms within a dwelling unit, where the host is physically present during the rental period and shares common living areas, such as the kitchen or bathroom, with the guests. Hosted STVRs are allowed in all zoning districts, but the host is required to obtain a permit from the County Planning Department.
To obtain a permit for a hosted STVR, the property owner must meet certain requirements, such as obtaining liability insurance, providing proof of payment of transient accommodations taxes, and complying with health and safety regulations. The maximum number of guests allowed in a hosted STVR is limited to two per room, up to a maximum of eight guests per rental unit.
Additionally, the property owner is required to post a sign in a conspicuous location on the property that indicates the name and contact information of the host, the number of bedrooms in the rental unit, and the maximum number of guests allowed. The sign must also include the permit number and the phone number of the County Planning Department.
It is important to note that these regulations may be subject to change and may vary depending on the location of the property and the specific zoning regulations in effect. It is recommended to consult County Planning Department for the most up-to-date information and guidance on hosted STVR regulations in Hawaii County.
STVR Application Packet, Statement of Compliance, and County Ordinance Bill
