If you're looking at a Kona, Waikoloa or Kohala Coast condo as a vacation rental, the price is only the first number. The next ones are the taxes that come off every booking. One of them went up this year.
The tax stack in 2026
For Hawaiʻi's transient accommodations tax, a short-term rental is a stay of less than 180 consecutive days.1 Rent one out and three taxes apply to your gross rental income:
- State transient accommodations tax (TAT): 11% as of January 1, 2026, up from 10.25%. The increase came from Act 96, the state's Green Fee law.12
- Hawaiʻi County TAT: 3%, paid directly to the County.3
- General excise tax (GET): 4% state plus a 0.5% Hawaiʻi County surcharge, for 4.5%.45
On a $200 night, state and County TAT alone come to $28. GET is on top of that.
What counts as rental income
This is where many owners get surprised. These taxes are on gross rental proceeds, not profit. Your mortgage interest, management fees and supplies don't reduce them. Mandatory fees a guest pays to stay, like cleaning fees, count as rental proceeds too.1
You can pass the taxes on to guests. Show GET and TAT as separate line items on the bill. If you charge one flat price without stating them separately, both GET and TAT apply to the whole amount. GET is due on everything you collect, including any GET you pass on.1
The County deadline is December 31
Since September 1, Hawaiʻi County has required hosted and unhosted rentals of less than 180 days to register with the County. Under Bill 175, the County Council set a grace period that runs through December 31, 2026.69
If you're buying a condo that's rented short term today, ask for its County registration and the seller's state GET and TAT license status before you count on that rental history. My vacation rental guide lists what the registration asks for.
Bill 147 is still moving
Bill 147 would rewrite parts of the County's vacation rental rules, including definitions for hosted and unhosted rentals, operating standards, fines and an enforcement fund. It got an unfavorable committee recommendation on October 6, then passed first reading before the full Council on October 21. It still needs a second reading, and at least one council member said their vote there isn't settled.78 Civil Beat reported on November 2 that a final decision is expected next month.9 More in my Bill 147 guide.
The rules are shifting. Confirm current requirements with Hawaiʻi County Planning before you buy.
None of this means a vacation rental can't work. It means the numbers have to include the taxes on every booking, the County registration, and the building's own rental rules before you write an offer. That's how I walk through every investor showing.
Market commentary, not financial, tax, or legal advice. Talk with a Hawaiʻi CPA about your situation.
Questions about a specific property?
Text or call me at (808) 642-6119, email [email protected], or send me a note. I'll get back to you personally.
A shorter version first went out in my Monday note on Substack on Oct 26, 2026 (original ↗). This page is the updated, sourced version, last reviewed November 2, 2026.
Sources
- Hawaiʻi Department of Taxation, An Introduction to the Transient Accommodations Tax (Rev. August 2026): files.hawaii.gov
- Hawaiʻi Department of Taxation, Announcement 2026-01 (Act 96, TAT rate change): files.hawaii.gov
- County of Hawaiʻi, Transient Accommodations Tax payments help center (Ordinance 21-89, 3%): tat.ehawaii.gov
- Hawaiʻi Department of Taxation, General Excise Tax (GET) information: tax.hawaii.gov
- Hawaiʻi Department of Taxation, County surcharge on general excise and use tax: tax.hawaii.gov
- Hawaii Tribune-Herald, Sept. 8, 2026: TVR registration takes effect: hawaiitribune-herald.com
- County of Hawaiʻi, County Clerk notice: bills passed first reading Oct. 21, 2026 (Bill 147, Draft 3): statelegals.staradvertiser.com
- Hawaii Tribune-Herald, Oct. 22, 2026: Busy day for the County Council: hawaiitribune-herald.com
- Honolulu Civil Beat, Nov. 2, 2026: Hawaiʻi Council deadlocked on rental bill: civilbeat.org
General information only, not legal, tax, insurance or lending advice. Facts reviewed against the cited sources on November 2, 2026; rules and rates change. Hayden Fennoy is a REALTOR® (S) with eXp Realty, not an attorney or tax professional. Verify any specific property with the appropriate County or State office and your own advisors.