Bookmark and Share Email this page Email Print this page Print Feed Feed
Monday, July 15, 2013

Should vacation rentals have a higher tax rate?

Should vacation rentals have a higher tax rate?

A proposal by Mayor Kirk Caldwell could result in higher property taxes for Oahu vacation rental owners.

In an appearance last week on Hawaii News Now’s “Sunrise,” Caldwell discussed possible strategies to pay for city worker raises. One of his suggestions is establishing a two-tier property tax system that would allow the city to increase the rate for owners of upscale properties in which they don’t live.

The mayor’s plan is included in one of several property tax bills the Honolulu City Council will hear on Wednesday. Bill 37 would adjust the real property tax rate for hotels and resorts to include transient vacation units, bed-and-breakfasts and time shares.

It’s a significant tax hike. Those properties that are currently taxed at the residential tax rate — $3.50 for $1,000 of net taxable property — would see the rate go up to $12.40. Caldwell says the change would affect only those who have high-end properties they don’t live in, so hypothetically the tax on a $1 million vacation home  would go from $3,500 to $12,400.

It’s not a new concept. Past mayors have tried, unsuccessfully, to change the rate to put more of a burden on those in a higher income bracket, while protecting Oahu owner-occupants from major tax increases.

Do you think vacation rentals and bed-and-breakfasts should be taxed at a higher rate? Please post your comments here or email me your thoughts.

Posted on Monday, July 15, 2013 in Permalink

Have Feedback? Suggestions? Email us!

About This Page

Honolulu Real Estate focuses on the Hawaii housing market, condos and homes for sale, Hawaii rentals and general news about real estate in Hawaii. It also includes stories on apartment living, home decor and profiles.

Melissa Chang graduated from the University of Hawaii with a degree in journalism and has been blogging since 2007, mostly on food and travel. She works primarily in social media, so you can find her online @Melissa808 on Twitter and Instagram.


Jaymes Song is a real estate agent at Prudential Advantage Realty in Kahala. Jaymes is in the top 7 percent of Prudential agents nationwide. Previously, Jaymes was at The Orange County Register, Honolulu Star-Bulletin and rose through the ranks to overseeing news and operations for AP in Hawaii and the Pacific Rim. Jaymes lives in the Portlock area and loves his real full-time job of being dad to two curious kids.

Got a question or story tip? Email us. 
Follow @RealEstateHNL on Twitter for updates. 
If you would like to receive HONOLULU Magazine's newsletter by email, sign up for our newsletter.