Short-Term Rental Allowance in Lihue, HI

Short-term rentals (STRs) are heavily restricted in Lihue and throughout Kauai County. New short-term rental operations are NOT permitted outside of designated Visitor Destination Areas (VDAs). Any short-term rental of a room or home for less than 180 days is prohibited in most areas and cannot be applied for, with limited exceptions for properties within the VDA or those with existing non-conforming use permits.

The County of Kauai has maintained strict regulations since 2009, limiting short-term rentals to specific tourism corridors including Princeville, Poipu, and the eastern Kapaa coastal area. Properties outside these designated zones that were legally operating before 2009 may continue under grandfathered non-conforming use certificates (NUCs), but no new applications are accepted.

How to Start a Short-Term Rental Business in Lihue

Eligibility Requirements

Starting a new short-term rental business in Lihue is extremely limited. You can only operate legally if:

1. Your property is located within a designated Visitor Destination Area (VDA)
2. Your property has a valid non-conforming use certificate (grandfathered from pre-2009 operations)
3. Your property qualifies for homestay operations under specific conditions

Initial Steps

1. Verify eligibility by contacting the Planning Department at (808) 241-4050 or emailing planningdepartment@kauai.gov
2. Provide your Tax Map Key (TMK) when contacting the department to expedite the eligibility verification process
3. Review the approved properties list available on the county website to confirm your property's status
4. If ineligible for short-term rentals, consider switching to long-term stays (180+ nights) as an alternative

Required Documents, Permits, Licenses, and Guidelines

Essential Documentation

• Tax Map Key (TMK) - 12-digit tax identification number
• Transient Accommodations Tax (TAT) number
• Hawaii General Excise Tax (GET) license
• TVR evacuation plan (required for all operations)
• Property ownership documentation
• Zoning verification documents

Renewal Requirements (for existing legal operations)

• Annual renewal application must be submitted at least 2 months prior to renewal date
• Certified mail submission required (return receipt requested)
• Complete renewal packet including all required attachments
• No grace period for late renewals - failure results in Cease & Desist orders

Tax Obligations

• Hawaii General Excise Tax (GET) on gross rental income
• Transient Accommodations Tax (TAT) on gross rental income
• Federal Form 1099 filing requirement through Hawaii Department of Taxation

Specific Regulations for Short-Term Rentals

County-Level Regulations (Kauai County)

• Ordinance 904 - Primary TVR regulations
• Ordinance 1002 - Homestay regulations
• Ordinance 950 - Fee structures and requirements
• No new permits available outside VDAs since 2009
• Strict renewal requirements with no late submission allowances
• Mandatory evacuation plans for all operating units

Operational Requirements

• Professional property management often required for compliance
• Regular inspections may be conducted by county officials
• Immediate cessation required upon permit expiration or violation
• Transfer notifications required within 30 days of property sale

Zoning Restrictions

• Residential zones - Generally prohibited except for grandfathered properties
• Agricultural zones - Subject to phase-out under state legislation
• Visitor Destination Areas - Primary zones where STRs are permitted

State-Level Regulations (Hawaii)

• Senate Bill 2919 (enacted May 2024) grants counties authority to phase out STRs in residential/agricultural zones
• Statewide tax requirements for all rental operations
• Environmental compliance may be required in sensitive areas

Contact Information for Local Authority

Primary Contact - Kauai County Planning Department

• Phone: (808) 241-4050
• Email: planningdepartment@kauai.gov
• Mailing Address: Planning Department 4444 Rice Street, Suite A473 Lihue, Hawaii 96766
• Website: www.kauai.gov/Government/Departments-Agencies/Planning

For Complaints and Violations

• Contact: Planning Department Inspector
• Phone: (808) 241-4050
• Required Information: Property owner name, Tax Map Key, street address, website advertisements, activity descriptions

Tax-Related Inquiries

• Hawaii Department of Taxation: tax.hawaii.gov/
• TMK Lookup: qpublic.schneidercorp.com/Application.aspx?App=KauaiCountyHI&PageType=Search

Source Links

• Primary Regulations Page: www.kauai.gov/Government/Departments-Agencies/Planning/Transient-Vacation-Rentals
• Airbnb Compliance Information: www.airbnb.ca/help/article/2900
• Local Industry Analysis: www.kauaikahuna.com/about-us/blog/senate-bill-2919-and-the-fate-of-short-term-rentals-on-kauai-2/

Important Document Downloads (Available from County Website)

• List of Approved Homestays & Non-Conforming TVRs by TMK
• Sample TVR Evacuation Plan
• 2025 TVR-NCU Renewal Application Form
• 2025 Homestay Recertification Application Form
• Ordinance 1002 (Homestays)
• Ordinance 904 (TVR Regulations)
• Ordinance 950 (Fees)

Critical Note for Investors: The short-term rental market in Lihue and Kauai County is essentially closed to new entrants outside of designated resort areas. Existing legal operations face strict compliance requirements and potential future phase-outs under evolving state legislation. Any investment decisions should include thorough legal consultation and verification of current property status through the Planning Department.