How the Additional Visitor Tax Fuels Affordable Housing on Kauaʻi

The tourism industry is a fundamental pillar of Kauaʻi’s economy. While tourism brings revenue blessings and hospitality jobs to Kaua’i, it also creates demand for short-term vacation rentals. As this demand has increased over the years, pressure on Kauai’s housing availability and affordability has also increased. The island’s infrastructure and housing challenges deepen as tourism demand grows.

Thankfully, in 2021, members of our mayoral administration and county council asked: How can the revenues generated by tourism help residents stay and thrive here? One key piece of that answer is the additional county levy on the Transient Accommodations Tax (TAT) — a modest surcharge paid by visitors staying short-term that channels dollars into housing solutions for island residents.

What is the County TAT Surcharge?

In September, 2021 the Kauaʻi County Council passed Bill 2829 to impose a 3% county TAT effective October 1, 2021, on any short-term rentals.   

Why Was This Surcharge Introduced?

The County of Kauaʻi faced a growing housing crisis: local families priced out, infrastructure stretched, and limited developable land. At the same time, tourism places demands on roads, utilities, emergency services and housing. The surcharge offers a way to harness tourism-driven revenue to benefit the local workforce and resident housing stock.

A resolution from the Council explicitly noted that the County’s Reserve Fund Policy should allow funds to be used “for affordable housing infrastructure or land acquisition.” Learn about what the Kauaʻi County Housing Agency does.

What the County TAT Surcharge Means for Kauaʻi’s Community

The 3% County Transient Accommodations Tax isn’t just another line item on a visitor’s hotel bill — it’s a meaningful tool that directly supports Kauaʻi residents and the long-term health of our local economy. Here’s how this revenue impacts key groups across the island:

For Residents and Workforce Families

The county TAT surcharge creates a steady stream of funding that helps relieve housing pressure for local families. These dollars support the development of income-restricted housing, long-term rentals, and essential infrastructure — giving Kauaʻi residents greater access to homes they can afford. Whether someone is relocating to the island or trying to stay rooted in their community, the surcharge helps expand real, attainable housing options. Learn more about Kauaʻi’s affordable housing projects completed since 2020.

For Real Estate Professionals

For those of us working in real estate, the county TAT surcharge offers a powerful narrative: Kauaʻi is intentionally reinvesting visitor-generated revenue back into its people. By aligning tourism dollars with long-term housing goals, the County is strengthening the foundation of our community and workforce. This message resonates with buyers, sellers, developers, and anyone who values sustainable growth — and it reinforces the importance of responsible, community-minded real estate.

For the Tourism Industry and Hosts

For hotels, vacation rental owners, and hospitality businesses, the surcharge represents a small cost — just 3% — but it delivers a big benefit. A stable, well-housed workforce is essential to providing high-quality visitor experiences. When residents can afford to live where they work, businesses experience lower turnover, stronger hiring pools, and a more resilient local economy. Tourism thrives when the community thrives.

If you’re looking to buy, build, rent or sell on Kauaʻi, and you want to align with housing-forward values and community investment — reach out and let’s talk about how we can partner for Hawaiʻi’s future homes, not just transactions.