With its vibrant city life, stunning beaches, and rich cultural heritage, Oahu is a premier destination for tourists from around the globe. Waikiki, in particular, stands out as a gem with its unique blend of natural beauty and urban convenience.
For those looking to invest in the flourishing tourism market, understanding the legal framework for operating a short-term rental in Waikiki is crucial to avoid operating illegal short-term rentals. In this guide, weโll explore the legal landscape and where to find complexes that allow legal short-term rentals in Oahu!
Short-term rentals are primarily allowed in resort-zoned areas to preserve housing for long-term residents.
Hawaii Tax Rules: Oahu Transient Accommodations Tax
Whether you operate a full-term resort or short-term rentals on Oahu, you need to comply with the Hawaiian tax rules.
If you rent out a short-term place in Oahu, youโll need to pay state and county taxes (TAT and GET). However, you can pass these taxes on to your guests.
Vacation rental owners have to register with Hawaiiโs Department of Taxation, file tax returns regularly, and pay county taxes to Honolulu and state taxes to Hawaii.
Unlike many states, hosts on Oahu need to manage all their tax stuff themselves. This includes registering, filing returns, and paying both state and county taxes.
Hosts need to get a Certificate of Registration from the Hawaii Department of Taxation and post the Tax ID on their online rental listings. The main taxes on income from rental properties are:
Transient Accommodations Tax (TAT): This tax applies to rentals of less than 180 days and is charged at 10.25% of the gross rental income.
General Excise Tax (GET): This is like a sales tax in Hawaii. The base rate is 4%, with an extra 0.5% surcharge on Oahu, making it a total of 4.5% on your gross rental income.
Oahu Transient Accommodations Tax (OTAT): For Oahu rentals of less than 180 days, thereโs an additional OTAT of 3% on the income generated.
If youโre renting a short-term place in Oahu, youโll need to handle these three taxes.
The Legal Landscape
Demand for vacation rentals in Hawaii, particularly the famed island of Oahu, is robust. However, this has led to state and county authorities implementing strict regulations to manage the influx of transient accommodations.
Regulations and restrictions related to short-term vacation rentals, which are properties rented for 30 consecutive days or less, are particularly stringent in visitor destination areas, resort zones, and specified districts.
Failure to comply with these regulations can result in heavy fines and, in severe cases, the loss of business licenses. Recent legal rulings and legislation have also impacted short-term rental owners, including injunctions in their favor and new bills affecting their operations.
For vacation rental property owners, ensuring your property is compliant can be daunting. Listing services like Airbnb and VRBO have started requiring a registration number before hosts can list their property, but the first step is to verify your plans with the local county zoning laws and contact your property management for any bylaws relevant to short-term rentals.
Itโs also crucial to stay informed on recent policy changes, which can be found on the Honolulu City and County websites.
If youโre looking for a trusted and local resource, our team is here to help! You can learn more about us and our vacation rental management services by following this link.
Now that you know the basics, letโs dive into legal short-term rentals in Waikiki.
What to Expect in Waikiki?
Waikiki is one of Hawaiiโs most popular tourist destinations, known for its beautiful beaches, luxury hotels, and lively nightlife. As such, itโs also a top location for vacation rentals. However, not all complexes in Waikiki allow short-term rentals.
While Waikiki offers a vibrant urban experience, the North Shore provides a more isolated, authentic Hawaiian experience with iconic tourist destinations and limited hotel competition.
Most properties in Waikiki are located within zoned areas for resort or hotel use, which means they can be rented out for short-term stays. However, some buildings have strict rules against vacation rentals and may only allow long-term leases.
Moreover, some buildings may require a minimum rental period of 30 days or more, impacting your ability to list your property on popular vacation rental websites.
As you can imagine, itโs absolutely essential to research the specific complex youโre interested in and speak with a knowledgeable Oahu real estate agent before making any commitments.
To get you started, keep scrolling to view 10 of the most popular buildings that allow vacation rentals in Oahu.
List of Buildings that Allow Vacation Rentals in Waikiki
1. Ilikai
Perched in a prime location, Illikai offers stunning views of the Pacific Ocean and is close to Waikiki and Ala Moana Beach Park.
This iconic destination introduced the condotel concept in Hawaii in 1964, blending condo ownership with hotel amenities. But donโt let its age fool you; the Illikai underwent a substantial renovation in 2014, improving its lobby, retail shops, and pool deck.
Type: Condotel, privately owned building with hotel amenities
2. Ilikai Marina
Located just down the road from the Illikai Hotel, Ilikai Marina offers a distinct blend of convenience and luxury for travelers seeking an unparalleled Hawaii experience.
These condominiums feature units with private lanais, where you can enjoy breathtaking sunsets and the tranquil beauty of the marina. Ranging from cozy studios to spacious one-bedroom layouts, each condo is equipped with a kitchen, making it ideal for both short-term getaways and extended stays.
Type: Residential
3. Bamboo Waikiki
Conveniently situated on Kuhio Avenue, only 1.5 blocks from the renowned Waikiki Beach, the Bamboo Waikiki Hotel is a sophisticated boutique hotel infused with Southeast Asian influences.
This hotel stands out as a distinguished option in Waikiki by providing a range of accommodations, including well-appointed hotel rooms, studios, and suites with full kitchens. Building amenities include a tranquil pool area, barbecues, and an on-site community laundry facility.
Type: Condotel, privately owned building with hotel amenities
4. Waikiki Banyan
Nestled just a block away from the inviting sands of Waikiki Beach, Waikiki Banyan is renowned for its family-friendly atmosphere and exceptional amenities.
This condominium complex boasts spacious one-bedroom suites equipped with full kitchens and private lanais, offering guests the comforts of home with the luxury of a resort. The property also features a fantastic 6th-floor recreation deck complete with a swimming pool, two hot tubs, a sauna, a barbecue area, and a childrenโs playground.
Type: Condotel, privately owned building with hotel amenities
5. Waikiki Sunset
Near the heart of Waikiki, the Waikiki Sunset provides an oasis of tranquility amidst the lively atmosphere. This residential-style condominium offers guests a unique combination of home-like comfort and resort amenities.
Each suite features a fully equipped kitchen and private balcony and is available in oneโor two-bedroom configurations. You and your guests will enjoy the on-site heated swimming pool, sauna, barbecue area, and convenience store.
Type: Condotel, privately owned building with hotel amenities
6. Waikiki Beach Tower
This prestigious condominium resort stands as a beacon for those who value both the vibrancy of beachfront living and the exclusivity of upscale accommodations. Each of the propertyโs suites is designed to maximize comfort with high-end furnishings, complete kitchens, and expansive private balconies that offer breathtaking views of the Pacific Ocean.
The resort facilities leave nothing to be desired. They feature a state-of-the-art fitness center, swimming pool, hot tub, two barbecues, and lounge, ensuring visitors of all ages have an unforgettable stay.
Type: Condotel, privately owned building with hotel amenities
7. Pacific Monarch
Nestled just a short stroll from the vibrant shores of Waikiki Beach, Pacific Monarch offers a unique retreat that combines convenience with tranquility and luxury.
Ideal for those who seek a more intimate lodging experience, this high-rise hotel provides cozy studios and one-bedroom suites, each equipped with kitchenettes and private lanais, allowing you to take in the Hawaiian breeze from the comfort of your rooms. The rooftop pool and jacuzzi present a unique opportunity for relaxation, boasting panoramic views of the ocean, the city, and the lush Diamond Head Crater in the distance.
Type: Condotel, privately owned building with hotel amenities
8. Island Colony
Situated in a prime area and currently the tallest hotel in Honolulu, Island Colony is a sanctuary for those who yearn for comfort and convenience wrapped in a tropical island aesthetic.
This towering hotel and condominium complex offers diverse accommodations, from spacious studios to one-bedroom suites, each boasting private lanais with stunning views of the city, the mountain, or the ocean. Amenities include a swimming pool, sauna, and recreation deck perfect for family gatherings or a casual meal under the stars.
Type: Condotel, privately owned building with hotel amenities
9. Aloha Surf
The Aloha Surf Hotel embodies the essence of Hawaiian hospitality within the bustling heart of Waikiki. Most of its units feature compact studio layouts, ideal for affordable income-generating investments.
There are numerous advantages, whether for yourself or your guests. Here, you will enjoy the added security of gated premises, a refreshing swimming pool, and a vibrant barbecue area where you can immerse yourself in the Aloha spirit!
Type: Condotel, privately owned building with hotel amenities
10. Scandia Tower
Located just half a block from the serene sands of Waikiki and near Kapahulu Avenue, Scandia Tower offers a perfect mix of island serenity and city convenience.
This high-rise condo complex presents spacious two-bedroom units with private lanais, providing stunning views for an authentic Hawaiian lifestyle experience. If that wasnโt enough, bike and surfboard storage is available.
Type: Residential
FAQs
What is a Short-Term Rental (STR)?
A Short-Term Rental (STR), also known as a short-term vacation rental, refers to any accommodation rented out for less than 30 consecutive days and is subject to specific regulations. These are typically vacation homes, condos, or rooms listed on platforms like Airbnb or VRBO.
Where are Legal Short-Term Rentals Allowed in Oahu?
STRs are primarily allowed in resort-zoned areas and some residential areas with specific permits. The main resort areas where STRs are allowed include Waikiki, Ko Olina, and Turtle Bay Resort.
How can I apply for an STR permit?
Applications for STR permits are processed by the Honolulu Department of Planning and Permitting (DPP). Applicants must submit various documents, including proof of ownership, a site plan, and neighbor notification.
Are there any restrictions on the number of guests or rental duration?
Yes, STRs often have restrictions on the number of guests based on the propertyโs size and zoning regulations. The minimum rental duration is generally 30 days, though exceptions exist in designated zones.
Want to Learn More?
Whether you currently own an investment property or are considering buying a vacation rental in Oahu, our team is ready to help you generate monthly income while ensuring compliance with local regulations.
One question weโre often asked is what the difference is between a condotel and a residential building. You can learn about condotels in Hawaii on our blog, and please donโt hesitate to contact us with any questions you have about short-term rentals in Oahu or Maui!
