Oahu suspends STR rules to help Maui wildfire survivors find temporary housing

Honolulu has suspended its short-term rental (STR) law to increase temporary housing options for Maui and Big Island wildfire survivors. The ordinance bans rentals for terms of less than 30 days except in certain resort areas. The suspension of these rules will last through August 31, 2023.

“In the spirit of wanting to do everything possible to help with this devastating and heartbreaking tragedy, we are suspending the 30-day requirement for short-term vacation rentals to help provide housing on Oahu for those most in need. We hope that this will provide some relief for any of our displaced neighbors who are in need of a safe place to stay during these trying times,” Honolulu Mayor Rick Blangiardi said.

Blangiardi also encouraged citizens to offer free or discounted rates for emergency housing.

Honolulu passed the STR ordinance in April 2022 in response to community concerns about neighborhood disruption and affordable housing issues. Shortly before the law was scheduled to go into effect in October 2022, a federal judge prohibited the city from implementing or enforcing the law’s ban on rentals of between 30 and 89 days in non-resort areas. 

The city said it would aggressively enforce other provisions of the law, including a ban on rentals of less than 30 days in residential areas. Under the ordinance, violations can result in fines of up to $10,000 per day.

Hawaii’s first short-term rental laws, passed in the 1980s, restricted short-term rentals outside of resort areas, offering exceptions to vacation rental properties that had already been established — which numbered about 800 at the time. Honolulu hasn’t issued any new short-term rental permits since 1989. However, it’s estimated that as many as 10,000 short-term rentals were operating on Oahu by the late 2010s.

The city had passed another law in 2019, but implementation was delayed due to the COVID-19 pandemic and potential issues with the law, and new enforcement positions that were created with the legislation were never funded.

In Hawaii, short-term rental income is subject to state and county transient accommodations tax (TAT) as well as general excise tax (GET). Vacation rental operators must pay the taxes based on their gross rental proceeds but can pass these taxes on to guests.

Hawaii transient accommodations operators must be registered with the state’s Department of Taxation, file regular tax returns, and pay county taxes to Honolulu tax authorities and state taxes to state authorities.

While vacation rental marketplaces such as Airbnb and Vrbo collect taxes on behalf of their hosts in many states, they’re not allowed to do so in Hawaii. That means Oahu hosts are responsible for taking care of all tax obligations, including registering, filing lodging tax returns, and paying taxes to both the state and the county.

MyLodgeTax can help Hawaii short-term rental hosts automate registration and filing for state and county TAT and state GET. For more on lodging taxes in the state, see our Hawaii vacation rental tax guide. If you have tax questions related to vacation rental properties, drop us a line and we’ll get back to you with answers.