Is Airbnb legal in Kihei?

Overview of Airbnb Regulations in Kihei, Hawaii

Kihei, located on the southwest shore of Maui, is a sought-after destination for short-term rentals through platforms like Airbnb. However, potential hosts must navigate a comprehensive set of regulations at both the state and county levels to operate legally.

Key Regulatory Requirements:

1. Transient Accommodations Tax (TAT) and General Excise Tax (GET):

   • All short-term rentals (defined as stays of less than 180 consecutive days) must register with the Hawaii Department of Taxation and obtain a TAT license, which requires payment of a one-time fee of $15. The TAT is currently set at 10.25% on rental income, in addition to a GET of 4.166%.

2. Short-Term Rental Home Permit (STRH):

   • In most residential areas of Kihei, property owners must secure a Short-Term Rental Home Permit from the Maui County Planning Department. To qualify:
     • The property must have been built at least five years prior to applying.
     • The owner must have owned the property for a minimum of five years.
     • A detailed application, including site plans, floor plans, parking plans, house rules, neighbor notifications, and a non-refundable application fee of $400, must be submitted.
   • The maximum number of STRH permits in the Kihei-Makena Community Plan area is capped at 100, and new applicants may face waitlists due to this limit.

3. Bed & Breakfast Permit:

   • Property owners may opt for a Bed & Breakfast (B&B) Permit, which allows for rentals of rooms in an owner-occupied home. The owner must be on-site during rental periods, with a limit of two bedrooms and four guests at any one time.

4. Compliance and Enforcement:

   • Failure to comply with local regulations can result in significant penalties, including fines up to $20,000 for initial violations and $10,000 for each day violations persist. The county is known for actively monitoring rental listings and responding to complaints about unpermitted rentals.

5. Exemptions:

   • Properties within the Hotel District or those meeting certain criteria may be exempt from the STRH permit requirement.

Tax Obligations:

Short-term rental operators in Kihei are subject to several taxes: - Combined Tax Rate: 17.416% which includes: - 4.166% GET - 10.25% TAT - 3% Maui County Transient Accommodations Tax (MCTAT)

Conclusion:

Kihei presents an attractive market for short-term rentals, but it is essential for owners to comply with the stringent local regulations to avoid legal repercussions. Aspiring hosts should consider consulting legal professionals or property management services familiar with Maui County regulations to ensure successful and compliant operation of their rental properties.