What to Know Before Purchasing a Vacation Rental on Oʻahu

Hawaiʻi has long been one of the most desirable places in the world to visit—and to own real estate.

With historical property appreciation averaging 5–7% annually over the past 35 years, paired with year-round temperate weather, U.S.-based banking, and unmatched natural beauty, Hawaiʻi remains a compelling destination for real estate investment.

A Guide to Short-Term Rentals (STRs) & Nonconforming Use Certificates (NUCs)

That said, owning a vacation rental on Oʻahu is highly regulated, and understanding the rules before you buy is essential. Below is a clear overview of what you need to know if you’re considering a short-term rental (STR) investment on Oʻahu.

A Quick Note Before We Begin

Each Hawaiian island has its own laws and regulations governing short-term rentals. This guide focuses specifically on Oʻahu.

The Basics: Understanding STRs on Oʻahu

What Is a Short-Term Rental (STR)?

Vacation rentals and lodgings that provide guest accommodation for less than 30 consecutive days. According to the City & County of Honolulu and the Department of Planning & Permitting, (DPP), in order to preserve housing for long-term residents, STRs are only permitted in resort-zoned areas and a couple of specific apartment-zoned areas in Waikiki.

What Is a Nonconforming Use Certificate (NUC)?

“Grandfathered” STRs that have been in operation since prior to October 22, 1986, and were issued a nonconforming use certificate (NUC), must renew their NUC every year to continue operating. New NUCs are not being issued. The city stopped issuing NUCs in Sept. 1990.

Platform & Process Updates

Beginning August 4, 2025, STR-related processes (not including nonconforming use certificates or NUCs) will transition to the new HNL Build platform. Click the link to go to the DPP website for more information.

 NOTE: For renewals, corrections and approval must be made by the license’s expiration date, otherwise the license becomes invalid.

STR Regulations: The Details That Matter

Registration & Compliance

• The DPP will continue to enforce STRs as less than 30 consecutive days. 
• The STR must be registered to be in compliance with the current law.

Governing Ordinances

STR regulations are imposed by the Land Use Ordinance(opens in a new tab), as amended by Ordinance 22-7(opens in a new tab), Ordinance 24-14(opens in a new tab), Ordinance 25-2, and Ordinance 25-52, which includes maps of the apartment-zoned areas where STRs are permitted. 

Disclosure Requirements When Selling

Pursuant to Ordinance 22-6, anyone selling real property must provide the buyer with a short-term rental disclosure form(opens in a new tab) (rev. May 2025) stating whether the property may be legally used for STRs.

Any change in ownership of the subject property or any change in the operator of the bed and breakfast home or transient vacation unit will require a new registration of the bed and breakfast home or transient vacation unit.

Each eligible unit must register separately, if an owner owns multiple units.

Any tax related questions should be directed to their respective office:

General Excise Tax and Transient Accommodations Tax inquiries should be directed to the State of Hawaii Department of Taxation (opens in a new tab).

Oahu Transient Accommodations Tax inquiries should be directed to the City and County of Honolulu Department of Budget and Fiscal Services (opens in a new tab).

Advertising Requirements

Advertisements for less than 30 day rentals must include the following: STR License or NUC # + the Tax Map Key of the property.

• Advertisements for rentals that are not registered or allowed by a NUC must also include the following statement: “this property may not be rented for less than 30 consecutive days. Rental prices will not be reduced or adjusted based on the number of days the rental is actually used or occupied.”
• Hotel and timeshare advertisements must include the tax map key for the property on which the hotel unit or timeshare unit is located.
• STR properties (rental terms of less than 90 days) must be registered with a $1K initial registration fee, and a $500 annual renewal fee

The Timeline: How We Got Here:

• Bill 89 became law as Ordinance 19-18 on 6/25/2019.
•  Bill 41 (CO 22-7) was updated on 10.13.2022 to allow for 30 day minimum rentals in any neighborhood, without requring a license.

All of this can really make your head spin! If you are not well versed or don’t have the time to keep up with these laws and the deadlines, you could face fines of $10,000 per day. 

How We Help Our Clients Succeed

• We will provide you with a rent proforma to give you up to date data on recent rental rates for your target property.
• We will provide you will the current tax information available through the tax department website, which will give you an estimate on the yearly property taxes you will be required to calculate into your bottom line.
• We help you make sound decisions, based on decades of experience in property management and proven client results.
• We offer full-service tax filing to ensure your taxes are paid on time.
• We assist with bill paying for routine services, such as pools, HVAC, yard service, and repairs.
• We have a dedicated team of reservationists and a full-time accounting department to ensure your business is running smoothly with monthly owner statements and year-end consolidation statements for your tax deductions.
• We offer NEXT LEVEL marketing on all major platforms such as Hawaiilife.com, VRBO, AIRBNB, Expedia, Google Vacations, Booking.com, American Express, Expedia, and Homes & Villas by Mariott, plus many others. More Eyeballs = MORE BOOKINGS…
• We offer rate management tools for legal STR property earning potential to boost performance and keep your calendar filled at a high occupancy ratio.

The Better Way

The best way is to hire a seasoned professional to help you assess whether the property you want to purchase is a good fit to rent as a profitable vacation rental. For more information about our services, give us a call, shoot us a text, or email us:

Diana Ricciuti RB-20863 | 808-386-2126 | dianaricciuti@hawaiilife.com | hawaiiluxurypropertyadvisors.com

Jill Lawrence RA-76144  | 808-206-0539 | jilllawrence@hawaiilife.com | nsluxuryliving.com