Big Island officials pass rules restricting Airbnbs

The Hawaii County Council has voted to approve new rules for short-term rentals on the Big Island after two years of working on the regulations. The Hawaii County Council sent the bill to the county Planning Department to draft the rules, which should be finalized by April.

The measure creates a new zoning classification for short-term vacation rentals, defined as dwelling units with no more than five bedrooms for rent, where the owner does not live on site, and which are rented for 30 consecutive days or less.

Under the new regulations, short-term vacation rentals are barred in residential and agricultural zones and only allowed in hotel, resort, and commercial zones. Short-term vacation rental operators must also register their rentals for a $500 fee. Existing rentals outside of the allowed zoning areas must apply for a nonconforming use certificate for a $250 fee.

Short-term rental properties must follow specific parking rules and noise regulations, and operators must be reachable within three hours of getting a call about the property from guests, neighbors, or government officials.

The bill also requires short-term vacation rental operators to show that all property and lodging taxes are paid.

In the state of Hawaii, short-term rental income is subject to a 10.25 percent transient accommodations tax (TAT) as well as general excise tax

(GET). Hosts can pass these taxes on to their guests. In Hawaii County, the GET will rise to 4.25 percent beginning January 1.

Unlike many states, Hawaii does not allow short-term rental platforms such as Airbnb, HomeAway, or VRBO to collect lodging taxes on behalf of their hosts. This means short-term rental hosts are responsible for collecting all lodging taxes and paying the taxes to authorities. Many Hawaii short-term rental operators use MyLodgeTax automation to simplify and manage lodging tax compliance.

Earlier this year, the Island of Hawaii Visitors Bureau reported that more than 6,000 short-term rental operators are doing business on the Big Island without registering with the state or collecting lodging taxes.

Hawaii County is not the only community in Hawaii changing short-term rental rules. In Maui County, voters recently approved a ballot initiative to dramatically increase fines for short-term rentals operating without a permit.

Beginning January 2, fines for illegal short-term rentals could go up to $20,000, plus $10,000 per day the unlicensed rental continues to operate. Currently, fines are capped at $1,000. The measure amends the county charter and will apply to the islands of Maui, Lanai, and Molokai.