Property Management Insights
Owning a rental property on Oʻahu can be an excellent long-term wealth strategy. However, Hawaii’s tax structure is unique, and many owners are surprised by the number of taxes that apply to rental income. Whether you own a long-term rental, vacation rental, or are considering converting your home into an income property, understanding these taxes ahead of time can prevent costly mistakes and penalties. Here are the primary taxes Oʻahu rental property owners should be prepared for.
General Excise Tax (GET)
Unlike most mainland states, Hawaii does not rely on a traditional sales tax. Instead, it uses the General Excise Tax (GET), which applies to rental income. What owners need to know:
- Applies to all rental income, both long-term and short-term
- Considered a business tax, not a sales tax
- Oʻahu rate: 4.5% (4% state + 0.5% county surcharge)
- Owners must file periodic GET returns
Even if your tenant is renting for a year or more, GET still applies. Many new landlords overlook this requirement and fall out of compliance.
Transient Accommodations Tax (TAT)
If your property is used as a short-term or vacation rental, an additional tax applies. TAT applies to rentals of less than 180 days. Current rates, which where updated in 2026:
- 11% State TAT
- Plus 3% County TAT
Additional requirements:
- Owners must obtain a TAT license
- Filing frequency depends on income (monthly, quarterly, or annually)
- Off-island owners must designate a local contact
Short-term rentals face the most complex compliance rules, which is why professional property management can be especially valuable for these properties.
County Property Taxes
All real estate in Hawai’i is subject to county property taxes, but rates vary significantly based on how the property is classified. Common classifications include:
- Residential
- Residential A
- Hotel/Resort
- Other use categories
Rental properties may be taxed at higher rates than owner-occupied homes, especially if used for investment purposes.
Why Professional Guidance Matters
Hawaii’s layered tax system is unlike anywhere else in the U.S., and regulations frequently change. Owners must often manage multiple tax registrations, ongoing filings, licensing requirements, and compliance with county regulations. At Caron B Realty International, our property management team helps owners navigate these requirements so they can focus on maximizing returns rather than worrying about compliance.
Rental ownership on Oʻahu remains a powerful investment, but success requires preparation and professional oversight. Before renting your property, be sure you understand:
- GET obligations
- Whether TAT applies
- Your property tax classification
- Filing and licensing requirements
If you’re unsure where your property fits, Caron B Realty Property Management is here to help. Our team specializes in providing concierge-level service, proactive communication, and unmatched local expertise. Contact us today to schedule a consultation and learn how we can protect your investment while maximizing your property’s long-term value.
Rental Management Experts
To learn more about our comprehensive property management services, click here or contact Doug at (808) 596-4883 or dougdavis@caronb.com. Visit our YouTube channel to watch our property management series, Ask Doug! in which Doug answers common property management questions.
