This post has been updated as of June, 2022: Read the Updated Post on Maui Vacation Rentals and Short Term Rentals
As a realtor here on Maui, working primarily in resort areas, the most frequently asked questions I encounter are "can I vacation rent this property when I'm not using it?" and, if so, "can I manage the property myself on a websitelike VRBO or AirBnB?".
The answer is, it depends. It isn't always straightforward, as there are several factors to consider that may govern the use of the property as a short term Transient Vacation Rental (TVR), including, but not limited to, state laws and statutes, Maui county zoning rules and regulations, and CC&R's (Declaration of Covenants, Conditions, and Restrictions).
TRANSIENT/SHORT TERM/VACATION RENTAL FAQS
For the purpose of the information below, "Transient Vacation Rental" or "TVR" is used interchangeably with the terms short term rentals and vacationrentals.
1. What is a Transient Vacation Rental (TVR)?
Per Maui County's website, a TVR (short term or vacation rental) is any rental of a housing unit for less than 180 days.
The Maui County Code Chapter 19.37 prohibits transient vacation rentals outside of the hotel district.
2. What if the property I'm considering does not fall under Maui County's Code's Hotel District? Can I still rent it short term as a TVR?
Per the Maui County TVR FAQwebpage: "an estimated 16,000-plus TVRs may operate legally in the County, many in multi-unit buildings, along with several hundred single family units. They operate legally because they are in an approved zoning district (hotel, business, historic, etc). Those that are not in approved districts and are operating legally, have applied for and received a “conditional permit” that is required to conduct a vacation rental business in a residential, rural or agricultural zoned district."
Per the current county code (County Code Chapter 19.12.20 section G), TVRs of condominiums are permitted in apartment zoningif they meet the following criteria:
1. The building or structure received a building permit, special management area use permit, or planned development approval that was lawfully issued by and was valid, or is otherwise confirmed to have been lawfully existing, on April 20, 1989.
2. Transient vacation rental use was conducted in any lawfully existing dwelling unit within the building or structure prior to September 24, 2020 as determined by real property tax class or payment of general excise tax and transient accommodations tax.
3. The property owner or operator holds general excise tax and transient accommodations tax licenses and is current in payment of State and County taxes, fines, or penalties assessed in relation to the transient vacation rental.
4. If a building or structure is reconstructed, renovated, or expanded, transient vacation rental use is limited to the building envelope and number of bedrooms that can be confirmed as approved or lawfully existing on April 20, 1989.
5. Advertisements for transient vacation rental use must include the subject property's registration number, which is the subject property's tax map key number, without punctuation marks.
For a single family and/or ohana homein the Apartment, Residential and Agricultural districts, if an exemption is not in place for the subdivision, an ownerwould have to apply for and gain approvalfor one of the following in order to use the property as a TVR:
- B&B Permit (County Code Chapter 19.64), per the zoning ordinances, the owner/proprietorof a B&Bshall be a resident of the County and shall reside, on a full-time basis, on the same lot being used as the bed and breakfast home.
- Short Term Rental Home (STRH) Permit (County Code Chapter 19.65). It should be noted that short term rental home permits are subject to a variety of conditions, the owner must have owned the home for five years prior to the application, they are currently non-transferrable, and the county has placed caps on the number allowed in each area.
- Conditional Use Permit:Outside of the above zoning districts, there are short-term rentals that have received approval to operate with a Conditional Permit.
- Update as of 4/12/2018: Maui County has passed a law that changes one of the requirements for the ability to apply for a permit to rent for any period of less than 180 days if the property does not have hotel zoning. Previously, the application required that the home be at least five years old. With the new law, the applicant must have owned the home for five years prior to applying for the short term rental home permit. This new law was passed on 3/27/2018 takes effect on 9/27/2018.
3. CanI manage a vacation rental or long term rental property myself? Can a relative or an employeemanage the property for me?
An owner canmanage their vacation rental or long term themselves, but they must be on island to do so. If the owner are not on island, they do need to provide their renters with a Local Contact and/or managing agent, who resides on island. Per Hawaii Landlord Tenant Code, Chapter 521, "An absentee landlord shall designate an agent to act on the landlord's behalf. The agent must reside on the same island as the rental unit." Per the DCCA, the designated on-island agent must be licensed if engaging in any activity for which a real estate license is required or manages property for more than one owner.
4. Is a landlord obligated to collect General Excise Tax (GET) and Transient Accommodations Tax (TAT)?
Yes. The landlord must collect and payGET and TAT per the Revised Statute 237.
5. When advertising a vacation rental online, are there any requirements?
Yes...enter Act 204 in 2016 and requirements relating to providing the registration, tax ID and provide the Local Contact information.In addition to helping to ensure owners of transient vacation rental properties collect and pay the appropriate taxes, it also helps consumers investigate whether an online rental advertisement is real or fraudulent and provides a contact in case of an emergency at the property.
Per the website for the Governor of the State of Hawaii, Act 204: "authorizes DOTAX to enforce civil penalties for operators and plan managers who fail to display the certificate of registration and registration ID numbers for transient accommodations and resort time share vacation plans. Authorizes DOTAX to issue citations for failure to provide the registration identification number or link to the number and the contact information of the local contact in an advertisement for a transient accommodation or resort time share vacation plan."
6. Does operatinga TVR affect my property tax rate? Does owning a condominium where TVR's occur impact my tax classification? (Updated 6.12.2021)
Yes. Read more on Maui County Property Taxes: new bills, assessments, and rates for 2021-2022
7. Any other comments?
When purchasing real estate, it is always advised to consult with the appropriate legal and tax professionals.
If considering a property that would be used as a TVR and not living on island, it is recommended to speak with and interview licensed professional management companies. There are sometimes on-site rental management offices, as well as independent real estate companies that specialize in management of transient vacation rentals.
If you are considering purchasing a property here on Maui to use as a Transient Vacation Rental (TVR), you should be sure to check on the current state and county zoning laws, rules and regulations, andtax laws,as well asthe Residential Landlord-Tenant Code. Per the Maui County website, there are proposed legislative bills that may change the permitting process, requirements andareas. Find more information on theseresource sites:
Information in this post is taken from the Maui County website and the Maui County Municipal Code website.Landlord Tenant Code and Short Term Rentals/Taxation are addressed in chapters 237, 467, and 521 of the Hawaii Revised Statutes
- Maui County Codes: Chapter 19 Zoning Ordinances and Permitted Uses
- Maui Real Property Tax Assessments: search properties
- Maui County: Real Property Division
- Act 204
- Short Term Rental Permit Information
- Minatoya Opinion
- Brochure Renting Residential, April 2016
- Brochure Transient Accommodations April, 2016
- For Consumers booking a vacation rental: "Per Maui County Website, there are more than 16,000 units (i.e., apartments, condos, houses) that are legally eligible to operate as short-term (less than six months) rentals without requiring a Bed & Breakfast Permit or Conditional Permit. These units are generally located in districts zoned for hotel use, but some are also located in apartment districts, or are covered by other pre-existing situations. The operation of short-term rentals in these zoning districts is consistent with current County of Maui zoning ordinances, Community Plans, General Plan, and State law. All short-term rentals are also required to pay State of Hawaii General Excise Tax (GET) and Transient Accommodation Tax (TAT). It is recommended that you inquire with the owner as to whether they are operating in compliance with all current laws." Lists of Permitted B&B's, STRH's, TVR's can be found on the county website using the link above.
Disclaimer: Information is taken from the above listed resources on the date of this post, May 15, 2017.While every effort has been made to ensure the accuracy of this article, it is not intended to provide legal,zoning & property use, or tax advice as individual situations will differ and should be discussed with your property management company,tax professional and/or attorney. Zoning and land use questions should be directed to the Maui County Department of Planning. Updates and amendmentsmay be made to the county and state laws and rules and regulations cited above, so all information contained herein should be not be relied upon without independent verification and should be researched at the time of purchase.