Short-term rentals in Kauai (Kauai County), explained properly.

Section 8-17.8(a) prohibits single-family transient vacation rentals in all areas not designated as Visitor Destination Areas, notwithstanding the underlying zoning, except for properties on the National or State Register of Historic Places. The VDAs are the areas designated on the County of Kauai zoning maps; the code refers to the Visitor Destination Areas of Poipu, Lihue, Wailua-Kapaa and Princeville. Check the County zoning maps or ask the Planning Department whether a parcel is in a VDA. A rental of a home or a room for 180 days or less counts: the code defines a transient as a person who uses a dwelling unit for 180 days or less when it is not that person's primary residence.

Single-family vacation rentals established in a VDA after March 7, 2008 must register with the Director of Finance before any rental use (time share units under HRS chapter 514E excepted); those existing on March 7, 2008 had 180 days to register. The Finance Director assigns a registration number, which must appear on the property sign, in all ads and inside the unit (see operating rules). All single-family vacation rental uses are subject to the County real property tax chapter (Chapter 5A).

Multi-family transient vacation rentals are allowed in hotels in the Resort or Commercial districts and in Resort and Residential districts within the VDAs. Multi-family vacation rentals outside the VDAs that existed on or before September 22, 1982 may continue, and no new ones may be created outside the VDAs. That older use is not lost through non-use unless it has clearly been abandoned for more than two years.

A nonconforming use certificate (NUC) was available only to single-family vacation rentals operating outside a VDA before March 7, 2008. The owner had to show, with a sworn affidavit and records such as GET and TAT filings, reservations and payments, that the home was used as a vacation rental on an ongoing basis before that date. Applications received more than one year after August 16, 2010 are not accepted, and the Planning Department says new short-term rental use outside the VDAs cannot be applied for. The Department publishes a list of approved homestays and nonconforming TVRs by tax map key and says a facility not on it should not be operating.

On land in the State land use Agricultural District, a NUC could be issued only if the home was built before June 4, 1976 or the owner obtained a special permit under HRS section 205-6 that specifically permits the vacation rental. If the special permit is denied, no NUC is issued and the rental must stop.

The holder must apply to renew every year on the date the certificate was issued, with proof of a currently valid State GET license and TAT license, and the application must reach the Planning Department before the certificate expires or renewal is automatically denied. The annual renewal fee is $750. At renewal the Department may re-inspect the property and withhold renewal until violations are resolved. The Planning Department says renewal packets must be mailed by certified mail, return receipt requested, at least two months before the renewal date, that it no longer accepts packets at the front counter, and that there is no grace period: failure to renew brings a cease and desist and notice of forfeiture.

The Planning Department says a new owner of an existing TVR should complete the current-year renewal application form (without attachments or payment) with updated information and submit it within 30 days of the recordation of the sale. It advises sellers to give buyers the original nonconforming-use file, the latest renewal application and the latest renewal letter.

Single-family homes listed on the National or State Register of Historic Places may be allowed to operate as transient vacation rentals through a use permit, following the same development standards as other vacation rentals.

A homestay is an owner-occupied dwelling in which the owner rents rooms to transient guests in the same unit the owner lives in. Homestay operations are prohibited outside the VDA. A homestay may have no more than three guest rooms and provides accommodations for 29 days or less. Homestays operate under a homestay zoning permit that must be renewed every year on its issue date, with proof of current State GET and TAT licenses and a $750 renewal fee.

During homestay operations the owner who receives the County homeowner's exemption (Kauai County Code section 5A-11) for the homestay site must be physically on Kauai, living at the homestay, and available to guests; no other person or representative may meet this requirement for the owner. Each yearly renewal must include proof that the home is the owner's primary residence and that the owner received the homeowner's exemption in the year before renewal.

The zoning code says a guest house shall not be used for a transient vacation rental or homestay operation within or outside the VDA, and the homestay definition says a guest house may not be used to house homestay guests.

Article 28 of the zoning code applies to zoning, use, variance and VDA subdivision permits that would allow more than one transient accommodation unit on a lot entitled to more than one dwelling unit. Transient accommodation units include hotel and time share units and single-family and multi-family vacation rentals. To build, develop or use such a unit, an applicant needs a transient accommodation unit certificate from the Planning Commission. The certificates available in each five-year allocation cycle equal 5.1% of the island's visitor unit inventory in the base year, halved if the inventory is above the County's target and raised by half in some cases. Projects permitted before December 5, 2008 and registered eligible resort projects are treated differently. We have not found the number of certificates set for the current cycle.

Single-family vacation rentals in a VDA and NUC holders must meet the development standards for single-family homes plus extra rules. The owner must name a contact person or owner's representative available 24 hours a day, seven days a week, and give the name and contact details to the neighbors next door and directly across the street, the Planning Department, the Kauai Police Department, the Kauai Civil Defense Agency and the Kauai Visitors Bureau when the NUC or registration number is issued, and keep them updated. Homestay owners must themselves be available around the clock during homestay operations.

One outdoor sign no larger than one square foot must be posted at the front of the property showing the current NUC or registration number and the 24/7 phone number, in numbers at least two inches high; no other signs and no direct lighting are allowed. The owner must give the Planning Department and post in the guest sleeping quarters a sheet titled "For the Safety and Comfort of You and Your Neighbors" covering suggested curfews, neighborhood character, gatherings and noise, and emergencies and natural disasters. Homestays have the same sign and information-sheet rules and must tell guests if the home is in the tsunami evacuation zone.

All print and internet advertising for single-family vacation rentals, including listings with a rental service or real estate firm, must include the NUC or registration number, and a copy of the certificate or registration number must be displayed on the back of the front door of the sleeping quarters. A site and floor plan is filed with the application. Homestay ads must include the zoning permit number and say if the homestay is in the tsunami evacuation zone. Hawaii's separate requirement to show the State TAT license number in ads is listed under state rules below.

Each bedroom used for a homestay requires one additional paved and designated off-street parking stall, and the home must at minimum be served by a septic system approved by the State Department of Health.

The owner of a unit operated in violation of the vacation rental article, and anyone else who violates it, can each be fined $500 to $10,000 for each offense, in addition to any criminal fines. If the violation does not stop within one month, each further day is a new and separate violation. The County Attorney may sue to stop a violation and collect penalties.

Advertising of any sort that offers a property as a transient vacation rental is prima facie evidence that a vacation rental is operating there, and the owner, operator or lessee must prove that it is not, or that it is legal.

The Planning Director, or a member of the public who has obtained standing under Planning Commission rules, may start proceedings to revoke or modify a NUC. Violating conditions of approval or giving false or misleading information is grounds for revocation or cease and desist orders.

Kauai County charges its own 3% transient accommodations tax on gross rental, gross rental proceeds and fair market rental value that are taxable under the State TAT law (Ordinance 1099, 2021), with the State TAT exemptions. Every operator or other taxpayer who receives gross rental proceeds pays it. Monthly returns and payments are due by the 20th day of the following month, filed with the State Director of Taxation as the County Finance Director prescribes. Operators must hold a State TAT certificate of registration; failing to do so is also a County civil violation of up to $1,000 per infraction.

Rental income in Kauai County is subject to the State general excise tax plus the Kauai County surcharge of 0.5%, in effect from January 1, 2019 through December 31, 2030, for a total of 4.5%. If you pass GET on to guests, the most you may charge is 4.7120%.

Hawaii's transient accommodations tax applies to short-term rentals, meaning rentals of less than 180 consecutive days. It is charged on the gross rental proceeds and is paid to the Hawaii Department of Taxation. Act 96 (Session Laws of Hawaii 2025) raised the rate from 10.25% to 11% for January 1, 2026 through December 31, 2030. Rentals of 180 consecutive days or more are not subject to the TAT. Each county also charges its own county TAT, paid directly to the county.

Hawaii's general excise tax is a tax on the business, charged on the gross income from renting real property, whether the rental is short-term or long-term. Gross income includes any GET you visibly pass on to guests. The state rate for renting real property is 4%; the Legislature lets each county add a surcharge of no more than 0.5% on activities taxed at the 4% rate. Owners may pass the GET and any county surcharge on to guests but do not have to; the Department of Taxation publishes the maximum pass-on rate for each county. GET is reported on Forms G-45 (periodic) and G-49 (annual).

The Hawaii Department of Taxation says operators of short-term rentals (less than 180 consecutive days) must register for a GET and TAT license, file periodic and annual GET returns (Forms G-45 and G-49) and TAT returns (Forms TA-1 and TA-2), and pay GET on all gross receipts and TAT on all gross rental proceeds unless an exemption applies. You register with Form BB-1, online through Hawaii Tax Online or by mail or in person with the registration fee. Failing to register for a GET license before doing business carries a $500 fine ($2,000 for a cash-based business). Using a property manager or other rent collector does not relieve the owner of these tax duties.

The Hawaii Department of Taxation fines operators who fail to display their TAT license number on any advertisement, including online listings: at least $500 per day for a first violation, $1,000 per day for a second and $5,000 per day for a third or later violation.

The Department of Taxation says each Hawaii county imposes its own county transient accommodations tax, which is paid directly to the county rather than to the state, and that counties have their own short-term rental rules, including zoning, permits and operating requirements. Check the county where the rental is located.