Hawaii Vacation Rental Update

A bill is circulating at the legislature that will allow for rental websites like Airbnb and VRBO to act like a tax collection agent in hopes to ease the burden of collecting taxes. The purpose of the bill is to allow transient accommodation websites to register as a tax collection agent with the Department of Taxation and collect and pay the state general excise tax and transient accommodation tax on behalf of vacation rental owners and renters. This bill was initiated by AirBnB to ensure that users of their website were following the laws of the state.

The current law states that any homeowner renting a room for less than 180 consecutive days are subject to pay general excise and transient accommodation tax. According to the Department of Commerce and Consumer Affairs, Hawaii law requires absent owners use an on-island property manager and have an on-island contact to collect taxes, including transient accommodations and the general excise taxes.

A study by the Hawaii Tourism Authority showed that Hawaii has an estimated 22,338 vacation rental units advertised on websites like VRBO.com (Vacation Rentals By Owner) and AirBnB. Maui County had the most in the state with over 8,000 vacation units; Oahu has over 4,400 units. According to HTA’s CEO, Ronald Williams, the study was conducted to help the counties understand the reach of this specific market segment when making future policy decisions.

For more information regarding the tax benefits of owning real estate please contact us.

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About the Author

Brandon Lau grew up in Kailua and currently resides in Honolulu with his wife Andee and children Caylah, Elijah, and David. His eighteen years in real estate led him to become a Partner at ChaneyBrooks Choice Advisors. Over the past 10 years he has developed the team and systems that has created a high level of service and value for his clients.

What differentiates Brandon and his team is his consultative approach to real estate. He advises clients with relevant data and expert insight to help them make the best choices in real estate. Good choices in planning for long term dispositions, negotiating for the best price or knowing when not to pursue an investment are ways his consultative services will give you an advantage in the marketplace. His bottom line is providing service with the utmost integrity and expertise.