Quick Answer: Hawaii’s short-term rental rules are complex, county-specific, and constantly evolving, with significant differences between Kauai, Oahu, Maui, and the Big Island. While the Kona-Kohala Coast offers some of the most flexible options, including designated Resort (RS) zones and a Non-Conforming Use Permit (NCUP) process, always consult a local expert for the most current information for your specific property and investment goals before making any decisions.
Key Takeaways: Navigating Hawaii’s Vacation Rental Landscape
- County-Specific Regulations: There is no single statewide short-term rental law. Each of Hawaii’s four major islands—Kauai, Oahu, Maui, and the Big Island—has its own zoning rules and permitting processes.
- Designated Zones Are Critical: Most islands require properties to be located within specific zoning districts (such as VDA, RMU, HR, or RS) to legally operate as short-term rentals.
- Big Island Flexibility: The Big Island, particularly the Kona-Kohala Coast, generally offers more pathways, including Resort (RS) zoning and the Non-Conforming Use Permit (NCUP) process.
- Regulations Evolve Frequently: Ordinances change regularly, requiring ongoing diligence and expert consultation to remain compliant.
- Beyond Zoning: Taxes, insurance, and professional property management are essential components of a successful short-term rental investment.
Over nearly two decades of selling luxury homes on the Kona-Kohala Coast, I have worked with hundreds of buyers considering Hawaii as a second home or vacation rental investment. One of the most common questions is: “What are the short-term rental rules? Where can I operate legally, and how does it affect profitability?”
The answer requires a structured approach. What I call the Polimino Investment Framework focuses first on zoning, then on permitting, and finally on financial analysis. Below are answers to the most common questions investors ask about Hawaii’s short-term rental landscape.
What Are the Hawaii Short-Term Rental Rules for My Investment Property?
Quick Answer: Short-term rental rules are determined at the county level, not the state level. Regulations vary significantly between Kauai, Oahu, Maui, and the Big Island.
Many mainland buyers assume there is one statewide law governing vacation rentals. In reality, each county enforces its own ordinances, zoning maps, and permitting systems. A property that is legally permitted for short-term rental on the Big Island may not qualify under Kauai or Oahu regulations.
For example, a luxury condo in a resort zone on the Big Island may allow vacation rentals, while a similar property outside designated areas on Kauai may be prohibited. Identifying the correct zoning classification is always the first step in evaluating an investment.
Can I Get a Short-Term Rental Permit on Kauai?
Quick Answer: On Kauai, short-term rentals are primarily limited to designated Visitor Destination Areas (VDAs). Outside those zones, new permits are extremely difficult to obtain.
Kauai has some of the strictest regulations in Hawaii. If a property is not located within a VDA, short-term rental activity is generally prohibited unless the property holds a legally established non-conforming permit. These permits are rare and highly valuable.
Key Points: Kauai
- Short-term rentals are typically allowed only within Visitor Destination Areas (VDAs).
- New permits outside VDAs are highly restricted.
- Existing non-conforming permits are limited and valuable.
- Zoning verification is essential before purchase.
What About Oahu’s Resort Mixed Use (RMU) Zones?
Quick Answer: On Oahu, short-term rentals are generally permitted only within Resort Mixed Use (RMU) zones.
Oahu restricts most short-term rental activity to designated RMU areas, often located in established resort districts such as Waikiki. Properties outside RMU zones typically cannot operate legally as short-term rentals unless they hold a rare, grandfathered permit.
Key Points: Oahu
- Resort Mixed Use (RMU) zoning is required for most legal short-term rentals.
- Grandfathered permits are limited and do not always transfer.
- Verification with the City and County of Honolulu is critical.
How Do Maui’s Hotel Resort (HR) Zones Impact My Condo Purchase?
Quick Answer: Maui generally permits short-term rentals within Hotel Resort (HR) zones.
Maui’s short-term rental activity is concentrated in HR zones, commonly located in resort areas such as Wailea, Ka’anapali, and Kapalua. Properties outside HR zoning typically cannot operate as vacation rentals unless they have an existing, legally established permit.
Key Points: Maui
- Hotel Resort (HR) zoning is required for most legal short-term rentals.
- HR zones are more prevalent than VDAs on Kauai or RMUs on Oahu.
- Always confirm zoning and county requirements before purchase.
Are There Non-Conforming Use Permits (NCUP) on the Big Island?
Quick Answer: Yes. The Big Island allows properties outside Resort (RS) zones to apply for a Non-Conforming Use Permit (NCUP), providing more flexibility than other islands.
On the Big Island, properties located in designated Resort (RS) zones can typically operate short-term rentals with fewer barriers. In addition, properties outside RS zones may apply for a Non-Conforming Use Permit (NCUP) through the County of Hawaii Planning Department. This process involves application review, public hearings, and planning commission approval.
Although the NCUP process can take six months to over a year, it expands investment opportunities beyond strictly resort-zoned properties. This flexibility is one reason the Kona-Kohala Coast is often considered one of the more accessible markets for vacation rental investors.
Key Points: Big Island
- Resort (RS) zoning is ideal for straightforward short-term rental operations.
- Non-Conforming Use Permits (NCUP) allow certain properties outside RS zones to operate legally.
- The application process can be lengthy and requires county approval.
- Local guidance is strongly recommended.
The Bottom Line: Investing in Hawaii Short-Term Rentals
Hawaii’s short-term rental market requires careful analysis of zoning, permitting, taxation, insurance, and management logistics. County-level regulations can significantly impact profitability and long-term viability. Because rules evolve frequently, investors should verify current ordinances directly with the appropriate county planning department and consult experienced local professionals before making decisions.
Frequently Asked Questions
Q: What is a VDA zone on Kauai?
A: A Visitor Destination Area (VDA) is a county-designated zone where short-term vacation rentals are generally permitted. Properties outside these zones typically cannot operate legally as short-term rentals.
Q: How often do Hawaii short-term rental rules change?
A: Regulations can change annually or more frequently, depending on county legislation. Investors should review current county ordinances before purchasing.
Q: Can I manage a Hawaii rental property from the mainland?
A: While ownership from the mainland is common, most owners rely on professional local property management companies to handle guest services, maintenance, and regulatory compliance.
Q: What taxes apply to Hawaii short-term rentals?
A: Short-term rental owners are generally subject to the General Excise Tax (GET) and the Transient Accommodations Tax (TAT), along with any applicable county surcharges. These taxes materially affect net income.
Q: How long does it take to obtain an NCUP on the Big Island?
A: The NCUP process typically involves application review and public hearings and may take six months to over a year, depending on the complexity of the application and the county’s schedule.
