Overview: Are Short-Term Rentals Allowed in Kapolei?

Yes, short-term rentals are allowed in Kapolei, Hawaii, but only in specific resort-zoned areas and select apartment-zoned districts. Kapolei falls under the jurisdiction of the City and County of Honolulu, which strictly limits short-term rentals to preserve housing for long-term residents. The vast majority of Kapolei properties are NOT eligible for short-term rental operations.

Short-term rentals in Kapolei are defined as lodgings that provide guest accommodation for fewer than 30 consecutive days. These regulations are enforced by the Honolulu Department of Planning and Permitting under Ordinances 22-7 and 24-14.

How to Start a Short-Term Rental Business in Kapolei

Step 1: Verify Property Eligibility

Before proceeding, you must confirm your property is located in a permitted zone using the City's STR Eligibility Map. Most properties in Kapolei are NOT eligible for short-term rentals.

Step 2: Obtain Required Tax Licenses

• General Excise Tax (GET) License: Apply through Hawaii Department of Taxation ($15 fee)
• Transient Accommodations Tax (TAT) License: Apply through Hawaii Department of Taxation ($5 for 1-5 units, $15 for 6+ units)

Step 3: Secure Insurance Coverage

Obtain commercial general liability insurance or homeowner's insurance with business liability coverage providing at least $1,000,000 per occurrence.

Step 4: Apply for STR Registration

Submit application through the Honolulu Department of Planning and Permitting with all required documentation and fees.

Required Documents, Permits, and Licenses

State-Level Requirements:

• Hawaii GET License (General Excise Tax)
• Hawaii TAT License (Transient Accommodations Tax)
• Federal EIN or SSN/ITIN

City and County of Honolulu Requirements:

• STR Registration (required for all legal short-term rentals)
• Title report showing proof of ownership
• Property site plan with boundaries, dimensions, setbacks, structures, and parking spaces
• Floor plan identifying transient occupant bedrooms, maximum occupancy per room, and fire exits
• Real property tax home exemption (for B&Bs only)
• Evidence that STR is permitted by applicable homeowner's association
• Informational binder including house rules, emergency contacts, trash disposal instructions
• Statement of compliance with applicable regulations
• Proof of liability insurance ($1,000,000 minimum coverage)

Application Fees:

• Initial STR Registration: $1,000
• Annual Renewal: $500

Specific Regulations for Short-Term Rentals

Zoning Restrictions:

• STRs are ONLY permitted in resort-zoned areas and specific apartment-zoned areas
• Properties outside these zones cannot operate as short-term rentals
• Exception: "Grandfathered" properties with Nonconforming Use Certificates (NUCs) operating since before October 22, 1986

Types of Permitted STRs:

Bed and Breakfast Homes (B&Bs):

• Owner or permanent resident must be present during guest stays
• Maximum of 2 rooms for rent
• Maximum of 2 adult occupants per room
• Requires real property tax home exemption

Transient Vacation Units (TVUs):

• Whole home or unhosted rentals (owner not required to be present)
• Maximum of 2 adult occupants per room

Operational Requirements:

• Maximum rental period: 29 consecutive days
• STR registrations are valid for one year and must be renewed annually
• Registrations are non-transferable
• Properties must comply with all building, fire, and safety codes
• Must maintain 24/7 emergency contact information

Tax Obligations:

• Hawaii State TAT: 10.25% of gross rental income
• Hawaii State GET: 4% of gross rental income
• Oahu GET Surcharge: 0.5% of gross rental income
• Oahu Transient Accommodations Tax (OTAT): 3% of gross rental income
• Federal and state income taxes on rental income
• Property taxes at applicable rates

Enforcement and Penalties:

• Operating an illegal STR can result in fines of $1,000 to $10,000 per day
• City actively issues Notices of Violation to illegal operators
• Properties must display STR registration number and tax ID on all online listings

Contact Information for Local Authority

Honolulu Department of Planning and Permitting

• Address: 650 South King Street, 7th Floor, Honolulu, Hawaii 96813
• Phone: (808) 768-8000
• Fax: (808) 768-6743
• Website: https://www.honolulu.gov/dpp/permitting/str/

Key Personnel:

• Director: Dawn Takeuchi Apuna
• Deputy Director: Bryan Gallagher
• 2nd Deputy Director: Regina Malepeai

For STR Applications and Renewals:

• Online application system (currently under renovation - check website for updates)
• STR Registration and Renewal portal available through the DPP website

For Reporting Suspected Illegal STRs:

• Request for Investigation Portal

Hawaii Department of Taxation (for tax licenses):

• Phone: Contact through main state directory
• Website: tax.hawaii.gov/

Source Links

1. City and County of Honolulu STR Information: www.honolulu.gov/dpp/permitting/str/
2. STR Eligibility Map: cchnl.maps.arcgis.com/apps/webappviewer/index.html?id=ed2eec39157f41d3a27901de4b3f7530
3. STR Compliance Map: cchnl.maps.arcgis.com/apps/webappviewer/index.html?id=a87c9d1a9c4147c48286f569701f21b4
4. Oahu Vacation Rentals Overview: www.hiestates.com/blog/oahu-vacation-rentals-rules-zoning-and-more-heading-into-2024/
5. Hawaii STR Laws Guide: www.gosummer.com/post/hawaii-short-term-rental-laws

Important Notes for STR Investors

Geographic Limitations: The majority of properties in Kapolei are NOT eligible for short-term rental operations. Most eligible properties are located in designated resort areas like Ko Olina, which has very limited short-term rental opportunities outside of specific resort developments.

Market Reality: Only the Beach Villas at Ko Olina in the Kapolei area offer true short-term rentals (less than 30 days). Other properties in Ko Olina have a 30-day minimum rental requirement.

Legal Compliance: Operating an illegal STR carries severe financial penalties. Always verify eligibility and obtain proper permits before beginning operations. The City and County of Honolulu actively enforces STR regulations and issues substantial fines for violations.

Future Outlook: Hawaii continues to tighten STR regulations to address housing affordability concerns. Senate Bill 2919, signed in 2024, gives counties additional power to phase out STRs in residential and agricultural zones. Investors should stay informed about potential regulatory changes that could affect their operations.