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As an Airbnb host, you have the opportunity to welcome guests from all over the world, share the aloha spirit, and earn extra income. 

But are short-term rentals, also known as AirBnb or VRBO, allowed in Hawaii? Airbnb’s operation on our islands is subject to several regulations, many of which currently make it difficult for Airbnb to host legally. While this information is not comprehensive or legal advice, and is current only at the time of writing, below are some legal considerations to consider when you’re thinking about becoming an Airbnb host.

Zoning laws dictate whether a property can legally be used as a short-term rental and vary on each island.

Oahu:  Are short term rentals allowed in Honolulu? Can you rent an AirBnb on Oahu? House Bill 89, also known as Proposition 19-18 , signed by Mayor Kirk Caldwell on June 25, 2019, will place a cap on the number of bed and breakfast (B&B) accommodations on the island. Specifically, no more than 0.5% of the total number of residential units in each community in the State of Oahu may be used as bed and breakfasts. These are 1,699 B&B rentals on Oahu; 183 B&B with legal permits at Koolau Poko (Kailua, Waimanalo, Kaneohe).

(Oahu short term rental permit limits vary by area)

No more than 0.5% of the total number of residential units in each Regional Development Plan Area (DPA) may be used as B&Bs.

The new laws also stipulate that new B&B owners can rent out two bedrooms to guests, and the owner of the property must legally live with the guests.

Other important changes:

• Ordinance 19-18 would allow approximately 1,700 bed and breakfast permits to be issued. Although the online lottery system for a legal B&B permit on Oahu is expected to begin in October 2020, it has not yet begun due to the passage of Ordinance 20-30, which modified  Ordinance 19 -18. and was signed by Mayor Kirk Caldwell on September 17, 2020. Therefore, the adoption of administrative rules and the start of registration of new bed and breakfasts have been delayed while the City and County of Honolulu Department of Planning and Permitting (DPP) reviews the registration process.
• Illegal B&Bs will be subject to hefty fines (think $1,000 to $10,000 a day!). As of June 4, 2021, the City and County of Honolulu had received 2,133 short-term rental complaints and issued 568 notices of violation (NOV).
• Specifically, for North Shore bed and breakfasts, with the exception of Kuilima, no new permits will be issued in the area under the North Shore Sustainable Communities Plan. However, for now, legal bed and breakfasts on the North Shore can accommodate guests until Oct. 1, when the city will begin issuing these new licenses.
• Kuilima Estates East and West , next to Turtle Bay Resort and Golf Course, now allows bed and breakfasts and short-term rentals. The decision was made on February 10, 2020 by the Department of Planning and Permitting (DPP) because Kuilima Estates East & West is within 3,500 feet of a resort area of ​​over 50 contiguous acres. See the map below for the permitted zone.

Maui: Can I rent an AirBnb on Maui? As of July 2019, there are over 16,000 apartments that are legally allowed to rent out homes for short-term rentals (less than six months) without the need for a bed and breakfast or conditional permit. These are typically found in hotel zones, but homes not included in the pre-existing criteria may be legally allowed to operate; as of November 2018, 353 vacation rentals had permission to operate outside the hotel zone. 

As of June 2021, the Maui Meadows region of the Kihei-Makena Community Plan and the Paia Haiku Community Plan region have reached their permit limit for short-term home rentals, or AirBnbs.

In Maui County, homes with a short-term rental permit can be rented without the owner present. To apply for a short-term home rental, you must  complete an application through the Maui County Planning Department , which must also include a zoning and flood verification form. The planning department processes these applications and usually takes several months.

(Maui short term rental permit limits vary by area)

Kauai: Are short term rentals allowed on Kauai? Airbnbs are legal in certain tourist areas (VDAs) or areas zoned for hotels. There are between 3,000 and 4,000 vacation homes in these areas, and Kauai no longer allows short-term rentals outside of these designated areas. If the vacation rental received a certificate of non-conforming use before March 2008, then the rental was transferred.

In short, any short-term rental for less than 180 days of a room in a house or an entire house or apartment is not permitted. Additionally, there is no application to apply for an AirBnb on Kauai unless you own a property in a Visitor Destination Area (VDA). The County of Kauai and its Planning Department regulate short-term rentals on the island of Kauai .

(Kauai short term rental permit restrictions based on visitor destination zone – VDA in red)

Big Island: Under House Bill 108, short-term vacation rentals on the Big Island or Hawaii County are now defined as a residence with no more than five bedrooms, rented for 30 consecutive days or less, in which the owner does not reside. on the spot. New short-term vacation rentals are not permitted in single-family residential or agricultural zones and are only permitted in hotel, resort, commercial and multi-family commercial zones. 

House Bill 108, also known as Ordinance 2018-114, also made it possible for existing short-term vacation rental properties to apply for a Certificate of Nonconforming Use so they could continue to operate in a generally unpermitted area. The County of Hawaii Planning Department  is tasked with administering and overseeing AirBnbs on the Big Island.

COVID-19 has added additional restrictions for Hawaii Airbnb, especially on the island of Oahu.

The question of whether Airbnb is legal in Hawaii has persisted throughout the coronavirus pandemic and adds further restrictions for many Hawaii vacation rental owners and travelers who want to experience paradise outside of a hotel.

Hawaii’s Airbnb laws have become more complex on Oahu and other islands during the COVID-19 pandemic. The mayors of Maui, the Big Island, and Kauai restricted vacation rentals in March 2020, but on June 16, 2020, they allowed legal Airbnbs to operate again. Legal short-term holiday homes can now operate; however, Hawaii State’s travel restrictions and other COVID-19 related mandates remain in effect, and Governor Ige has stated that these rules will remain in place until Hawaii’s vaccination rate reaches 70 percent.

Airbnb listings – legal or illegal – must comply with Hawaii tax laws.

(1) Certificate of registration. Airbnb hosts must obtain  a Certificate of Registration  from the Hawaii Department of Taxation as required by Hawaii State law . Upon successful receipt of a Certificate of Registration, Airbnb hosts must post the TIN on their online listing. 

(2) Temporary Occupancy Tax: After registering and receiving a tax identification number, Airbnb hosts are ready to pay taxes to the government! The temporary residence tax applies to stays of less than 180 days. From January 1, 2018, the tax on temporary housing is 10.25 percent.

(3) General Excise Tax: Hawaii has no sales tax; instead we have a General Excise Tax (GET) , which is levied on all business activity, including short-term lettings. The current GET is 4.712 percent on Oahu.

(4) Property Tax:  Property taxes in Hawaii vary by county. 

Effective July 1, 2021, the City and County of Honolulu, which covers the island of Oahu, has a new property tax class: Bed and Breakfast (Class J). A legal Hawaii Airbnb on Oahu will likely fall into this class, and the tax is 0.65% of the assessed value.  Read more about property taxes in Honolulu here . In short, a bed and breakfast is defined as a rental of less than 30 days where the homeowner or other operator is present during the stay, which is ultimately the definition of Airbnb in Hawaii. A typical B&B would be when someone rents out a room in their own home where they live. Short-term vacation rentals (TVR) are defined as “unhosted” or “whole house” rentals of less than 30 days when the owner or operator is away; TVRs are taxed in the hotel and resort class at a rate of 1.39%.

Property tax rates in Maui County, which includes the island of Molokai, are $11.08 per $1,000 of net assessed value for “short-term rentals” such as Airbnb, and $10.70 per $1,000 of net assessed value for zoned properties.” hotel and resort. as of July 1, 2020.

In Kauai County, the 2021 property tax rates for short-term occupancy are $9.85 per $1,000 of net assessed value for “vacation rental” properties and $10.85 for “hotels and resorts” zoned properties.

There are no taxes on residential rentals or short-term rentals in Hawaii County or the Big Island. The tax rates that may apply to Airbnb in Hawaii County are the hotel/resort property tax, which is $6.15 per taxable building valued at $1,000 from July 1, 2021 through June 30, 2022.

Building laws and neighborhood regulations add additional rules to Airbnb listings.

Building and Housing Standards: The Oahu Building Code  and  Residential Code define minimum construction, maintenance, and health and safety requirements. Codes vary between residential and non-residential properties and by island, so refer to the codes for more information.

Other rules. There may be other contracts or rules that govern your potential Airbnb listing, such as lease agreements, HOA rules, or co-op or condominium rules. Read your lease agreements or contact the appropriate parties if applicable.

Complying with laws and regulations is no easy task.

The Appleseed Hawaii Center for Law and Economic Justice estimates that there are 23,000 vacation rentals in Hawaii , many of which are illegal. 

Inspectors on each island try to enforce zoning laws. But with thousands of Airbnb listings and fewer than twenty zoning inspectors in each county, enforcement is problematic. Online advertising does not provide sufficient evidence that the Airbnb listing is illegal. Inspectors must obtain information such as the visitor’s name, length of stay, and compensation documents. Once the inspector has enough evidence and issues a violation notice, the Airbnb host has 30 days to make corrections or face a fine.

It’s also difficult for states to determine whether Airbnb hosts pay state taxes. Due to privacy laws, the state Department of Taxation is currently seeking a subpoena to collect host information from Airbnb. 

Finally, on December 23, 2019, the City and County of Honolulu published an online form  asking the public to report any suspected illegal Airbnb rentals. So far there have been many reports of inspectors following up on leads.

While there are several controversial and potentially changing rules governing Airbnb listings, the benefits of being an Airbnb host may outweigh the bureaucratic burden. For more information, consult an attorney, accountant, Planning and Permitting Department, Taxation Department , or other county or state agency.