Hawaii Struggles to Enforce Legislation Regarding Vacation Rentals
March 24th, 2010The vacation rental industry is a large part of the Hawaii economy. Not only does it play a large role in tourism, but it also is a large contibutor to state taxes due to the transient accommodations tax. Just recently with the struggles of the economy the state and counties have had a hard time enforcing policies that have been set to regulate the industry.
The first issue is non conforming use of homes. This is when the homeowners attempt to rent their properties out as vacation rentals when the land use ordinance does not allow for that property to be a vacation rental. In these instances the fines can range from $50-$1000/day. Many homeowners can reach $100,000 in fines quickly. Typically if the county brings the issue to the homeowners attention and it is dealt with in a timely manner the fine will be drastically reduced up to 75%. If it is not dealt with in a timely manner then the county can enforce the maximum penalty since this non conforming use falls in the category of the homeowner doing it solely for financial gain.
The second issue is homeowners attempting to rent their properties out on their own and not being fully aware of the taxes for vacation rentals. For vacation rentals not only do you have the general excise tax, but you also have the transient accommodations tax of over 8%. This tax was raised by 1% in 2009 and will be raised another percent in 2010. There are a substantial amount of owners that do not pay this tax. Another fair amount of owners were unaware of the tax increases and did not charge the guests accordingly and did not pay the state the correct amount. Failing to pay the correct taxes for a vacation rental is fraud and homeowners can potentially be imprisioned.
Where the battle of legislation comes into play is that the counties would like to see the tax records from the state to see who is paying transient accommodations taxes. The counties are confident that most people do pay at least a portion of the transient accommodations taxes to avoid legal issues. If the counties could gain access to this information then they could compare the data to the land use ordinances to see who is renting their home out as a vacation rental in an area where this is not allowed. The state of Hawaii tax department can not share the information with the counties due to legislation. The two have battled for over a year now and no agreement has been met.
As the economy continues to struggle the state of Hawaii is bound to see this as a greater issue in the future. Many second homeowners are doing what they feel they need to do to keep possession of their home and not lose it to foreclosure. Hopefully in the near future the counties and state can reach an agreement to help policies be enforced.
The Green Sand Beach is located at the very south end of the Big Island. It is in a very remote location but worth the effort to see. To reach the beach, go down the South Point Road. Follow the road to the left and go to the boat ramp. If the soil is dry and you have a 4-wheel drive vehicle, you can drive farther. However, we recommend you park near the ramp and walk the mile to the beach. You will have to descend the remains of a collapsed cinder cone to the beach. This is steep and somewhat precarious. The beach is the result of the front half of a cinder cone collapsing into the ocean, leaving a sandy beach. There are no public facilities in this area.
Hapuna Beach is the most well known beach on the Big Island of Hawaii. Hapuna Beach features is one of the largest white sand beaches on the Big Island of Hawaii. The waters are also very friendly for families, with the exception of the winter months where you can find very rough surf. There are picnic tables, bar b que pits, as well as showers for use while spending the day there. Hapuna Beach State Park is a great beach for anyone.
The beach at Mauna Lani Bay is a snorkelers dream. Mauna Lani Bay offers calm waters with a white sand beach just in front of the Mauna Lani Bay hotel. The Mauna Lani Bay hotel has a program where they raise sea turtles and then release them when they are ready. This happens on July 4, Turtle Independence Day. Due to this many sea turtles call the Mauna Lani Bay “home”. While spending a day at Mauna Lani Bay you are sure to see turtles swimming in the waters as well as resting on the beach. Mauna Lani Bay is great for families and snorkelers.
Kolea is located on A’Bay, the only sandy beach at the Waikoloa Beach Resort.
Both complexes have a wide range of views.
The standard finishes within Kolea condos are better than what you will find in a Halii Kai condo.
Although both Kolea and Halii Kai have nice pool areas, the Halii Kai Ocean Club is a step above the Kolea Beach Club.
The cornerstone of the Waikoloa Beach Resort is the Hilton Waikoloa. This expansive hotel spans over 62 acres and consists of four towers and two large resort style pools. Within the hotel you will find seven dining choices. KPC is the nicest restaurant and is located on a bluff giving an amazing ambiance. The Kona Pool is the most popular pool and consists of multiple jacuzzis, a grotto, and a waterslide. The Kohala Pool is comprised of two pools connected by a “lazy river”. You will also find a few smaller slides at this pool. Since the Hilton Waikoloa is not located on the beach, they designed a lagoon area fed by the ocean. Enjoy water activities and snorkeling here.
If you choose to stay in a vacation rental, the Waikoloa Beach Resort has the best selection on the Big Island. From vacation rentals as low as $100/night to luxurious beachfront rentals as high as $600/night, there is a vacation rental for everyone. 