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Hawaii Island

Do We Really Need This?

I love Harry Kim. I mean, who doesn’t? At the recent wastewater meeting, he offered a sensible approach to the biggest issue our county faces (in my opinion).

Concerns About the Transient Accommodation Rental Bill

However, his support of the proposed Transient Accommodation Rental bill (Hawaii Tribune Herald 2/25/2024) needs a deeper dive. Unfortunately, there’s not enough room here to explain all the ways this bill is misguided.

Implications of the Proposed Bill

In short, the county is proposing rules that regulate every rental of any kind under 180 days. Registration, regulations, and county reporting will apply. Registration is not cheap, and violations of the confusing rules are crazy expensive. Renting any portion of your principal residence increases your tax rate and decreases your homestead exemption. If renting short term, you can now also add Transient Accommodation Taxes to the mix.

Examples of Unintended Consequences

Here are a few examples of situations with potential unintended consequences:

  • Want to rent your OHANA or guest house?
  • Going on sabbatical for 3 months and want to rent your house?
  • Like to travel and think you’ll have someone rent the spare rooms while you are away?
  • Want to rent your grown kids’ room?

Increased Costs Passed Onto Tenants

In any case, it will cost at least $725 registration along with the aforementioned increase in the tax rate, decrease in the homestead exemption, elimination of the 3% homeowner’s tax cap, and the required TAT payment – all charges passed on to the tenant.

Questioning the Effectiveness

Like Bill 108 (licensed vacation rental rules), one of the stated purposes of this bill is to increase long-term rental availability. So far, there is no proof that STVR rules have accomplished this purpose. In my mind, the most direct consequence of Bill 121 is the further erosion of our real property rights.

Public Response and Further Action

During the recent County Council hearing, only 2 testified in support of this bill but over 50 were in opposition, and yet it was still forwarded to the Windward Planning Commission. We need to spend time on wastewater (directly affects housing affordability), homelessness, and other critical issues, but I’m not sure we need this.

Feel free to be further confused by looking at www.HawaiiCountyTar.com. Let me know if you think we really need this.

Posted on in Hawaii, Hawaii Island, Tips, , , , ,

Denise Nakanishi
About the Author

Denise Nakanishi

Denise Nakanishi is a REALTOR Broker with Hawai'i Life. Denise Nakanishi is one of Hilo's most acclaimed real estate agents. She reached the rank of Major in the US Army and is now known by many as "Major Mom." The nickname fits–not only does Denise bring the discipline and mission-oriented attitude you'd expect, she's also caring and compassionate, always looking out for her clients like they're her own family. Having made the Big Island her home since 1987, Denise combines her extensive knowledge of the area with a sharp focus on customer service and the results speak for themselves. She's the recent recipient of the Best East Hawai`i, Best of Zillow, Chairman's Circle Award, President's Circle, Top Producing Agent since 2001, and Realtor of the Year awards. Denise stays ahead of the curve because she's passionate about education–she served as Education Chair for Hawaii Island REALTORS® for many years. She's one of Big Island's best real estate resources, known for her weekly article in the Hawaii Tribune Herald. Denise leads Team Nakanishi for Hawai`i Life, who is committed to their family, work, and community. In her little time away from work, Denise is a committed runner and Grandy. She also devotes many hours to various Veterans' Organizations, the East Hawaii Cultural Center, and the Hawaii Island REALTORS®. You can email me at denise@hawaiilife.com or via phone at (808) 936-5100.

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