Update, November 2, 2026: On October 21, 2026, the full County Council passed Bill 147 (Draft 3) on first reading, 7 to 0, with Council Members Inaba and Villegas absent.2 It still needs a second reading. Civil Beat reported on November 2 that a final decision is expected next month.4 Draft 3 calls both types "transient vacation rentals" (hosted and un-hosted), instead of the "bed and breakfast" and "short-term vacation rental" labels in earlier drafts.2
If you own a short-term rental here, or you're shopping for one, pay attention to what happened on October 6. The County Council's planning committee voted 5 to 4 against recommending Bill 147.1 That vote did not kill the bill. It moved to the full County Council for more debate, and likely more changes.
What Bill 147 would actually do
Bill 147, introduced by Hāmākua Councilwoman Heather Kimball, would split vacation rentals into two categories: hosted stays and unhosted stays. Earlier drafts called them bed and breakfasts and short-term vacation rentals.12 It would also drop the use-permit requirement for hosted rentals in residential zones that meet operating standards.23
That last part matters more than it sounds. At the October 6 committee meeting, Kimball said that without Bill 147, everyone operating a hosted rental in residential areas will be required to get a use permit, which adds cost and paperwork for homeowners renting out a room or two.1
The committee's disagreement came down to definitions. North Kona Councilman Holeka Goro Inaba said the proposed new terms still confuse what counts as a bed and breakfast, and he wanted more time before voting yes.1
Where Ordinance 25-50 stands right now
Separate from Bill 147, Ordinance 25-50 already created the County's registration and annual fee requirements for vacation rental operators. Registration opened September 1 and, under Bill 175, stays open through December 31, 2026.5
Planning Director Jeff Darrow described operators as being in limbo while Bill 147's fate is undecided, and he expects a wave of new registrations once it's resolved either way.1
If you're sitting on an unregistered rental, or underwriting a short-term rental purchase, that limbo is your window to get ahead of the paperwork instead of behind it. My vacation rental guide lists what the registration asks for, and my 2026 tax stack covers GET and TAT.
What to do if you're buying or holding a vacation rental
As of November 2, 2026, no date was posted yet for second reading, and the hosted-versus-unhosted rules could still change. Don't treat anything here as final. Confirm your property's zoning, registration status, and use-permit requirements directly with the Hawaiʻi County Planning Department before you buy, sell, or budget around rental income.
This is market commentary, not legal or tax advice. Vacation rental rules on the Big Island have shifted more than once this year, and they can shift again before you close.
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 15, 2026 (original ↗). This page is the updated, sourced version, last reviewed November 2, 2026.
Sources
- Hawaii Tribune-Herald, Oct. 7, 2026: Bill 147 returns, gets negative recommendation from council committee: hawaiitribune-herald.com
- County of Hawaiʻi, County Clerk notice: bills passed first reading Oct. 21, 2026 (Bill 147, Draft 3, vote listed): 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
- Hawaii Tribune-Herald, Sept. 8, 2026: TVR registration takes effect: hawaiitribune-herald.com
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.