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Council debates new bed‑and‑breakfast homeowner tax class and amnesty; bill held for further review

Hawaii County Council, Committee on Finance · July 22, 2026
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Summary

Bill 173 would create a bed‑and‑breakfast homeowner tax class with a 3% cap and a temporary amnesty to encourage registration; council members raised fairness, implementation, and timing concerns and the bill was posted for further committee review.

Council member Kimball introduced Bill 173 to establish a new "bed and breakfast home" real‑property tax class for properties that are vacation rentals and the owner’s principal residence, to set a 3% annual assessment cap for that class, and to provide a temporary amnesty period for properties that have been operating vacation rentals in violation of homeowner class restrictions. Kimball said the amnesty is designed to promote compliance with registration requirements under ordinance 25‑50 and to protect local residents who use their home as a host‑occupied rental.

Members debated whether creating a separate class with a 3% cap is fair compared with other in‑home commercial uses, and whether the proposal could unintentionally undercut incentives for long‑term rentals. Kimball and other members noted operational concerns for the Real Property Tax office (forms, notices) and asked staff to involve the real property tax administrator and deputy in future hearings. Kimball emphasized the amnesty: "the primary, aspect of this bill that I would really encourage us to move forward is the amnesty part so that we can ensure full compliance with the registration process." The committee agreed to hold further review and posted the bill to the August 4 committee meeting.