We have been repeatedly asked by visitors to follow what might be happening around the corner on the island of Hawaii. New proposed vacation rental rules have just been unveiled. These would affect more than 150,000 rental units there, from 2023.
There are also a range of new fees and fines proposed for all Hawaii County vacation rentals, as the county seeks to have a record for every unit on the Big Island. Any unit advertised without registration will be subject to a $10,000 fine, as proposed. Also for the first time, new rules will impact what is called “hosted” accommodation.
Interestingly, the Big Island is also considering new vacation nodes, which would be short-term rentals in some areas where they are currently not allowed.
The bill was unveiled online last week at a forum and will be followed by another in January. It will then go through various processes, including committees, and should land in full council by February if all goes according to plan.
The county council plans to intentionally include all interested parties in the process. A board member said: ‘We wanted to make sure we walk everyone through these proposed changes, so we’re going to take our time with that.
For the first online session, approximately five hundred people attended virtually out of the nearly 900 who had completed the registration process.
Current vacation rental rules only apply to self-contained (“non-guesthouse”) accommodations.
These are vacation rental units now rented for a period ranging from 1 to 30 consecutive days. The new law is expected to be broader in scope and will apply to regulate all holiday rentals of less than six months.
Rentals hosted with an owner residing on the property may be prohibited.
Previously, hosted accommodation was not subject to holiday rental regulations. However, there will now be a range of rules and fees for these owner-occupied properties, including properties with guest houses, second homes and farm accommodation. It also sets rules and fees for hosted rentals where the owner also resides.
At this time, it appears the county intends to ban some or all of these “hosted rentals”.
Limits on the number of vacation rental guests per unit.
The new ruling proposes to limit the number of guests per vacation rental as follows.
- One bedroom – two occupants, plus two additional occupants.
- Two bedrooms – four occupants, plus two additional occupants.
- Three bedrooms – six occupants, plus two additional occupants.
New rules for parties at Hawaii vacation rentals.
In the event of a party, a vacation rental may have up to twice as many occupants as is usually permitted. A party in the unit that includes those staying there cannot contain more than double the number of people allowed to stay overnight (we’re assuming that means for just one night). So the two-bedroom unit, with six people sleeping in it, could have a gathering of up to 12 people, according to the proposal.
No more vacation rental owner fees to bolster county revenue beyond current taxes.
Vacation rental owners will undoubtedly pay more fees in the future. The county is exploring options to increase its vacation rental revenue. You will recall that the county charges a 3% tax on top of the state vacation rental tax, which currently brings in nearly 18% of the total tax.
Vacation rentals in non-vacation rental areas.
It is proposed that certain areas where vacation rentals are otherwise prohibited be granted vacation rental approval. These include Hawaiian Paradise Park, Kona Bay Estates, Puako, Volcano Village, and Volcano Golf and Country Club.
What do you think of the upcoming changes to Big Island vacation rental rules?
22-22-11 Draft LAW – Rental of transitional accommodation
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