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With the popularity of online room reservation systems such as Airbnb® and Vrbo™, many homeowners have jumped on the short-term property rental bandwagon. While short-term rentals can benefit both homeowners and guests, there are regulations set by Maui County and the state of Hawaii that you should consider. 

3 Regulations for Short Term Property Rentals on Maui

1. Permits Required

To operate a short-term rental or bed and breakfast, you must have an approved permit and relevant business licenses. Approved short-term properties are rentable without the owner being present, but a manager (if not the owner) must be accessible and on-island.

Bed and breakfasts require that the owner live in or on the property. These establishments are designated as those that rent space for less than 180 days

Keep in mind that additional permits may be required if the property is on zoned agricultural land. Also, property rented for more than 180 days may be subject to different tax rules, so check with the County to be sure.

property-rentalNew applicants for short-term rental home permits must prove that they’ve owned the property under review for at least five years. Those with applications in process who have owned a property for fewer than five years may still be eligible for a permit. To apply, visit the Maui County website.

Unlicensed operators may be subject to stiff fines and penalties.

2. Transient Accommodations Tax

In addition to the short-term rental permit, property owners must have a license for the Transient Accommodations Tax (TAT) and General Excise Tax (GET). These apply to the entire state.

Currently, Hawaii doesn’t allow platforms such as Airbnb to collect these taxes on behalf of property owners, so you must manage this yourself. To fully comply with these tax rules, it’s smart to work with a tax accountant or attorney on Maui who is familiar with these laws. Check out answers to common TAT and GET questions here

3. Property Caps

There are caps on the number of approved properties for both short-term rentals and B&Bs per residential area. Once these caps are filled, no more permits will be issued. For example, Hana is limited to 30 permits, while Kihei-Makena is allowed 100. To see a list of permitted properties on Maui or find out if permits are currently being issued, check with the Maui County Planning department.

 

For help with your short-term property rental, contact Classic Maui Properties. Serving the island since 1972, these experts handle property management, real estate, and appraisals. Call (808) 878-1001 to make an appointment, or visit the website to learn more about their services.

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