Thinking about purchasing a condominium or a single-family home on the Big Island of Hawaii with the hopes of renting it out as a short-term vacation rental? Make sure you do your research to verify that the property you are wanting to purchase can indeed be legally rented as a short-term vacation rental. Zoning Laws now dictate the legality of short-term rentals here on the Big Island.
Short Term Vacation Rentals in Hawaii
Prior to December 2018, all properties could be rented as a STVR, no matter the zoning or having an owner on the property with guests. In fact, the Big Island of Hawaii was the last island in the state to crack down on STVRs. But now we have Bill 108 in place, also known as Ordinance 2018-114, passed by Governor Ige in November 2018. Under this Bill, owners of STVRs are now required to register their property with the County of Hawaii.
Residential Zones No Longer Eligible as Short Term Rentals
This bill was amended in September of 2019, making homes in residential zones no longer eligible to apply for an STVR Permit. New STVRs are no longer allowed in single-family residential and agricultural zones. Now only those properties that are located in hotel, resort, commercial, and multi-family commercial zones are eligible to get a new STVR.
However, those homes that currently had an STVR in place prior to September 2019 were grandfathered in and can both keep and renew their STVRs with certain restrictions in place. Basically starting April 1st 2020, all nonconforming residential properties that currently had an STVR were given 180 days to obtain a Nonconforming Use Certificate from the County. If one missed the deadline, then the right to legally vacation rent the property was forever lost.
Zoning for Short Term Rentals on the Big Island
I know this all sounds very confusing, but I will further explain the details for you. I bet you are wondering why this even took place. A few reasons come to my mind, including irritated neighbors with an STVR residence near and the hotel industry wanting less competition. Many neighbors that have an STVR close to them have become bothered with too many cars with lack of parking and noisy partying in their neighborhood. Hotels currently are experiencing less occupancy than STVR’s! I too personally prefer to rent an STVR than stay in an expensive Hotel. This has become the norm for so many areas of our country, so don’t be surprised that Hawaii has followed suit.
Do Your Research
Now that you know that zoning laws dictate whether or not the property can legally be used as an STVR, you must do your research if you are planning on a purchase hoping to rent it out short term. Be aware that one can purchase a home with no grandfathered STVR in place in a single-family residential zone if you are planning a B&B type rental. You, as owner, must be living in the house and onsite when you have STVR guests. This type of vacation rental is exempt from the Permitting process.
Any property that is in a zone that begins with a V for vacation is generally allowed to either continue with current STVR that is in place or apply for a new STVR. STVR’s that are in place can be transferred to a new owner as long as the current owner is up to date on all fees and filings. Most Condominiums located in Resort Properties fall into this category. However, Condominiums not located in a Resort Property vary from one location to the next. For this reason, if you are planning a purchase of a condo with the hopes of doing STVR, check the zoning!
Single-Family Homes as Vacation Rentals
Single-Family Residences are a different animal altogether. If you want a second home here on the Big Island and planning to rent it out as an STVR while you are not here, it must have the STVR in place, be up to date on filings and fees, and have the Nonconforming Use Permit. The STVRs of residential properties such as these are transferrable to new owners and will be allowed to continue. Annual renewal of these STVRs must be completed and paid by the deadline or lost forever. Another factor to remember is that once an owner stops using the house as an STVR, it permanently loses its ability forever.
It may seem like purchasing a property here in our Aloha State is complicated, but with the right Realtor representing you, owning a successful STVR is achievable. If planning on having your own vacation property on the Big Island, owning a legal vacation rental is both a smart and lucrative choice!
Want to Know More?
Feel free to reach out with any questions you may have regarding homes and land currently available in the Puna District. I look forward to helping you find the perfect property on the Big Island of Hawaii.