Property Management Taxes In Hawaii

This guide covers the taxes that actually apply to a property management company operating in Hawaii, and to the rental income it handles on behalf of owners. Every figure below is tied to the statute, agency rule, or published guidance that sets it, so you can confirm a rate or deadline before acting on it.

Sales Tax On Rent: What Applies And What Does Not

Hawaii is the major exception to the national rule. There is no sales tax, but the General Excise Tax is a privilege tax on gross business income, and renting real property is a taxable business activity. LONG-TERM RESIDENTIAL RENT is TAXABLE. The GET rate on gross rental income is 4%, plus a 0.5% county surcharge in all four counties, for a combined 4.5%. On top of that, stays of less than 180 consecutive days are also subject to the Transient Accommodations Tax, which rose from 10.25% to 11.00% on January 1, 2026, and counties may add a county TAT of up to 3%. Gross income is measured before any expenses, so the management fee is not deductible from the owner's GET base.

• The GET rate on gross rental income is 4%, plus the county surcharge if applicable. Renting real property located in Hawaii is a taxable business activity, and this applies to long-term residential rentals, not just vacation rentals. (An Introduction to Renting Residential Real Property, questions 1, 2 and 10)
• The GET is a privilege tax imposed on business activity in Hawaii, measured on the gross income received before any business expenses are deducted, and gross income includes any cost passed on to the customer such as the GET itself. (An Introduction to Renting Residential Real Property, question 4)
• All four Hawaii counties impose a 0.5% county surcharge on the 4% GE tax rate. Honolulu's runs January 1, 2007 through December 31, 2030; Kauai's January 1, 2019 through December 31, 2030; Hawaii County's 0.5% January 1, 2020 through December 31, 2030 (0.25% for calendar year 2019); and Maui's January 1, 2024 through December 31, 2030. The maximum rate that may be visibly passed on to the customer in each of these counties is 4.7120%. (County Surcharge and Maximum General Excise (GE) Tax Pass-On Rates table)
• The Transient Accommodations Tax applies to accommodations rented to a transient person for less than 180 consecutive days. Long-term rentals are not subject to the TAT, but they remain subject to the GET. If a tenant intended as short-term stays longer than 180 days, TAT may or may not apply based on the facts, but GET still applies. (An Introduction to Renting Residential Real Property, questions 2, 5, 6 and 8)
• Act 96, Session Laws of Hawaii 2025 increased the TAT by 0.75%, from 10.25% to 11.00%, on gross rental or gross rental proceeds from furnishing transient accommodations and resort time share vacation units, effective January 1, 2026. (Department of Taxation Announcement No. 2025-03, June 9, 2025)
• Effective January 1, 2022, each county may establish a county transient accommodations tax not to exceed three per cent of the gross rental, gross rental proceeds, and fair market rental value, in addition to the state TAT. A county electing to establish a TAT must do so by ordinance. (Outline of the Hawaii Tax System as of July 1, 2025, item (4) Transient Accommodations Tax)
• The management fee is an expense of doing business and is not an allowed exemption or deduction. If the tenant pays $1,000 of rent and the agent deducts a $100 management fee, the owner owes GET and any TAT on the full $1,000, not on the $900 net remitted. (An Introduction to Renting Residential Real Property, question 21)
• Gross rental income subject to GET includes mandatory resort fees, and includes tenant payments of mortgage, utilities, insurance, maintenance fees or real property taxes on the owner's behalf where the owner is legally responsible for those bills. Amounts a tenant pays for expenses the tenant is legally responsible for, such as electricity billed in the tenant's name, are not included. (An Introduction to Renting Residential Real Property, questions 15 and 18)
• Retained security deposits are subject to GET on the amount kept, for example when applied to final month rent, cleaning fees or repairs. Late fees, lease-break penalties and late cancellation charges are subject to GET and are reported as Interest and All Others, but are not subject to TAT. (An Introduction to Renting Residential Real Property, questions 16 and 17)
• A lessor who subleases real property may claim a deduction of up to 87.5% (0.875) of gross rental income, making the effective GET rate on subleases 0.5%. Forms G-71 and G-72 apply. (An Introduction to Renting Residential Real Property, question 10)
• GET and TAT may be visibly passed on to the tenant by separately listing them on the bill or lease agreement, but consumer protection law does not allow visibly passing on more than the actual GET due on the transaction. If the landlord charges a flat fee without separately listing the taxes, GET including the county surcharge and TAT are owed on the entire amount. (An Introduction to Renting Residential Real Property, questions 11 and 12)
• There is no minimum amount of GET or TAT below which no tax is due. If there is no gross income for a filing period, a periodic return must still be filed showing zero. (An Introduction to Renting Residential Real Property, question 13)

Property Tax

Hawaii has no state real property tax. The four counties assess and bill real property, and Honolulu's classification system penalizes non-owner-occupied property directly: without a home exemption, a parcel assessed at $1,000,000 or more falls into the tiered Residential A class at $4.00 and $11.40 per $1,000 instead of the ordinary $3.50 residential rate. Short-term vacation rentals and bed-and-breakfast homes carry their own higher classes.

• For the tax year July 1, 2025 to June 30, 2026, City and County of Honolulu rates per $1,000 of net taxable value are Residential $3.50, Residential A Tier 1 (first $1,000,000) $4.00, Residential A Tier 2 (in excess of $1,000,000) $11.40, Hotel and Resort $13.90, Bed and Breakfast $6.50, Transient Vacation Tier 1 (first $800,000) $9.00, and Transient Vacation Tier 2 (in excess of $800,000) $11.50. (Real Property Tax Rates for Tax Year July 1, 2025 to June 30, 2026)
• Under Revised Ordinances of Honolulu (2021) Section 8-7.1(c)(4), Residential A means a parcel improved with no more than two single-family dwelling units that has an assessed value of $1,000,000 or more, does not have a home exemption, and is zoned R-3.5, R-5, R-7.5, R-10 or R-20 or is dedicated for residential use. It also captures a condominium unit assessed at $1,000,000 or more without a home exemption. (Residential A Classification, Revised Ordinances of Honolulu (2021) Sec. 8-7.1(c)(4))
• Honolulu illustrates the cost of losing the home exemption on a $1,600,000 property: with a $120,000 home exemption the property is Residential class and owes $5,180, while the same property with no home exemption is Residential A and owes $10,840 under the tiered rates. (Real Property Tax Calculations, Examples 1 and 2)
• Honolulu's property tax calendar runs July 1 to June 30. Annual bills are mailed July 20 with the first installment due August 20; second installment bills are mailed January 20 and due February 20. The exemption application deadline is September 30, the date of assessment is October 1, assessment notices are mailed or posted December 15, and Board of Review appeals must be filed by January 15. (Important Dates, Real Property Assessment Division)
• Real property taxes paid on a Hawaii rental are not deductible from gross rental income for GET or TAT purposes, even though they are deductible for income tax purposes. (An Introduction to Renting Residential Real Property, question 9)

Registration And Recordkeeping

Registration is through a single application, Form BB-1, which produces separate Hawaii Tax Identification Numbers for GET and TAT. Hawaii places specific duties on managing agents, including filing rental collection agreements and recognizing that the owner remains liable even when the agent handles the filings. Short-term operators must post a TAT registration certificate and a local contact, with escalating daily fines for failure.

• Register for GET and TAT by completing Form BB-1, State of Hawaii Basic Business Application, online at hitax.hawaii.gov, by mail, or in person at a district tax office. The GET registration fee is $20. The TAT registration fee is $5 for 1 to 5 transient accommodation units and $15 for 6 or more units. Separate Hawaii Tax Identification Numbers are assigned for the GET and TAT licenses. (An Introduction to Renting Residential Real Property, questions 28, 29 and 30)
• An owner filing their own returns needs only one Hawaii Tax Identification Number for all Hawaii rental properties, but where more than one managing agent files GET and TAT returns for separate properties, it is preferable to obtain a separate Hawaii Tax Identification Number for each managing agent to use. (An Introduction to Renting Residential Real Property, questions 24 and 31)
• The first page of the rental collection agreement filed by the managing agent must include the owner's name, address, social security number, Hawaii Tax Identification Number, and the address of the rental property. Where the agreement was oral, the agent must furnish that information to the Department instead. (An Introduction to Renting Residential Real Property, questions 25 and 27)
• The owner remains responsible for filing returns and paying tax on time even where the management agreement puts that duty on the managing agent. If the returns are not filed on time, penalty and interest are assessed against the owner. (An Introduction to Renting Residential Real Property, question 23)
• Income must be reported based on when the managing agent receives the rent from the tenant, not when the owner receives the remittance from the agent, because a tenant paying the authorized agent is the same as paying the owner. (An Introduction to Renting Residential Real Property, question 22)
• Every operator of transient accommodations must keep an accurate record of gross proceeds and gross income, including journal entries, ledger entries, profit and loss statements, contracts and agreements, invoices, and all records involving the furnishing or arranging of transient accommodations. (Tax Facts 96-2, Transient Accommodations Tax, question 20, Revised May 2025)
• Operators must display the TAT registration certificate in each unit being rented, or post a notice stating where it may be inspected, and must post the name, phone number and email address of a local contact located on the same island. Failure carries a fine of $500 per day for a first violation, $1,000 per day for a second, and $5,000 per day for a third or subsequent violation. (Tax Facts 96-2, Transient Accommodations Tax, question 18, Revised May 2025)
• When a rental is sold and it was the owner's only business activity, the GET and TAT licenses are cancelled with Form GEW-TA-RV-1. If the owner will pause rather than exit, Form L-9 places the tax accounts on inactive status for up to two years, renewable once for a further two years. (An Introduction to Renting Residential Real Property, question 45)
• A Hawaii Tax Identification Number is issued to a specific person or entity and may not be transferred to a different person or entity when the property is sold or gifted. (An Introduction to Renting Residential Real Property, question 34)

Recent Changes Worth Tracking

• Effective January 1, 2026: Act 96, Session Laws of Hawaii 2025 increased the state transient accommodations tax by 0.75%, from 10.25% to 11.00%, and extended the TAT to cruise ship operators' gross rental proceeds from cruise fares, prorated by the ratio of days docked in State ports to the duration of the voyage. (Department of Taxation Announcement No. 2025-03, June 9, 2025)
• Effective January 1, 2026: Under Act 96, whether the 10.25% or 11.00% TAT rate applies turns on the taxpayer's accounting method. Cash basis taxpayers apply 11.00% to proceeds actually or constructively received on or after January 1, 2026. Accrual basis taxpayers apply 11.00% where the right to receive income is fixed under the all events test on or after that date. All taxpayers are presumed cash basis under HRS section 237D-1 unless they prove otherwise. (Department of Taxation Announcement No. 2025-03, June 9, 2025)
• Effective Bracket changes effective tax year 2025; standard deduction increase effective tax year 2026: Act 46, Session Laws of Hawaii 2024 widened the individual income tax brackets beginning in tax year 2025, with further bracket changes in 2027 and 2029, and raises the standard deduction in steps in 2024, 2026, 2028, 2030 and 2031. For tax year 2026 the standard deduction rises to $16,000 joint or surviving spouse, $12,000 head of household, and $8,000 single or married filing separate. (Department of Taxation Announcement No. 2024-03, June 3, 2024)
• Effective January 1, 2024: Maui County's 0.5% general excise tax county surcharge took effect, bringing all four Hawaii counties to a 0.5% surcharge and a 4.5% combined GET rate on rental income, with a maximum visible pass-on rate of 4.7120%. The Maui surcharge runs through December 31, 2030. (County Surcharge and Maximum General Excise (GE) Tax Pass-On Rates table)

Tax is one half of Hawaii compliance. See our guide to Hawaii property management laws and regulations for licensing, trust account, and disclosure rules.

This page is one half of the picture. See our guide to how Hawaii taxes rental and management income for the rest.

Keeping This Straight

Tax rates and thresholds move more often than most operators expect, and the figures circulating in older articles go stale quickly. Check any rate against its citation before you quote it to an owner, and re-check them at the start of each tax year.

This guide is a starting point for professional managers, not tax or legal advice. For a specific filing, work with a CPA familiar with Hawaii rental property, and confirm current figures with the Hawaii Department of Taxation or the IRS.

Sources

Every fact above is drawn from one of the official sources below.

• An Introduction to Renting Residential Real Property, questions 1, 2 and 10, Hawaii Department of Taxation, An Introduction to Renting Residential Real Property
• County Surcharge and Maximum General Excise (GE) Tax Pass-On Rates table, Hawaii Department of Taxation, County Surcharge on Hawaii General Excise Tax
• Department of Taxation Announcement No. 2025-03, June 9, 2025, Hawaii Department of Taxation, Announcement No. 2025-03
• Outline of the Hawaii Tax System as of July 1, 2025, item (4) Transient Accommodations Tax, Hawaii Department of Taxation, Outline of the Hawaii Tax System as of July 1, 2025
• Real Property Tax Rates for Tax Year July 1, 2025 to June 30, 2026, City and County of Honolulu, Real Property Assessment Division, Residential A Information
• Tax Facts 96-2, Transient Accommodations Tax, question 20, Revised May 2025, Hawaii Department of Taxation, Tax Facts 96-2
• Department of Taxation Announcement No. 2024-03, June 3, 2024, Hawaii Department of Taxation, Announcement No. 2024-03