Suppose you buy a condo on Lower Honoapiilani Road, keep it as a quiet second home and never rent it to anyone. Maui County can still tax it at the transient vacation rental rate, which is more than double the rate for a non-owner-occupied home. The class is set by what the building's zoning permits. The way you use the unit only matters if you qualify for one of a few specific exemptions. Every zoning decision on this stretch of shoreline between now and January 2029 is therefore also a property tax decision. The figure printed on a listing sheet tells you very little about which side of that decision the unit will end up on.
The Rule That Taxes a Quiet Condo as a Rental
The language comes from Ordinance 5493, which amended section 3.48.305 of the Maui County Code. Dwelling units in the apartment district or in a planned development "must be classified as 'TVR-STRH' if transient vacation rentals are a permitted use." The only exceptions are units that qualify as long-term rental, commercialized residential, apartment or owner-occupied. The Real Property Assessment Division's 2026 classification presentation describes it the same way: dwelling units in the apartment district go into TVR-STRH "if transient vacation rentals are permitted."
The rule asks whether the building is allowed to rent nightly, not whether this particular unit is rented. Most of the Minatoya-era complexes along Lower Honoapiilani Road are apartment-zoned buildings where nightly rentals have been permitted. A unit there stays in the vacation rental class unless its owner moves into one of the exempt classes.
One $850,000 Unit, Four Different Tax Bills
The FY2027 rates took effect July 1, 2026, and are listed in the Appendix B schedule reproduced in Ordinance 6018. Here is how they apply to an illustrative $850,000 Honokowai condo. That value sits below every class's first tier ceiling, so one rate covers the whole assessment.
| How the unit is classified | FY2027 rate per $1,000 | Exemption applied | Annual tax on $850,000 |
|---|---|---|---|
| TVR-STRH | $13.00 | None | $11,050 |
| Non-owner-occupied | $6.25 | None | $5,312.50 |
| Long-term rental | $2.90 | None shown | $2,465 |
| Owner-occupied | $1.65 | $300,000 home exemption | $907.50 |
That is a twelvefold spread on the same unit at the same address. The long-term rental row leaves out the exemption on purpose: the County's FAQ says a one-unit condominium may qualify for a $200,000 long-term rental exemption, which would lower that bill further.
This year's changes widened the gap for entry-priced vacation rental units. The first TVR-STRH tier used to cover values up to $1 million and now stops at $900,000, and its rate rose from $12.50 to $13. The second tier went from $14 to $15 and the top tier from $15.55 to $17. The first non-owner-occupied tier rose more modestly, from $5.87 to $6.25.
Each of the lower classes has a condition attached. The long-term rental class requires a signed lease to the same tenant for at least 12 consecutive months and an application filed by December 31. The home exemption requires the owner to live in the unit more than 270 days a year, file a Hawaii resident income tax return with a Maui County address, and never rent the whole premises. Claims are due December 31, and the lower tax starts the following July 1. A seller's home exemption does not carry over to a buyer who uses the unit differently, so the tax figure on a listing describes the seller's arrangement, not yours.
What Happens to the Rate When Nightly Rentals End
Bill 9, enacted as Ordinance 5909, phases out transient vacation rental use in apartment districts in the West Maui community plan area by December 31, 2028. The use is prohibited starting January 1, 2029. The rest of the county follows two years later. Once nightly rentals are no longer a permitted use, the condition that places these units in TVR-STRH stops applying to the building.
The County has said where it expects those units to go. Its December 15, 2025 signing release says "many returned units are expected to transition to long-term residential tax classifications" and puts the possible revenue reduction at about $60 million. Ordinance 5909 tells the Department of Finance to send the affected parcel list, with each parcel's current classification, to the Council every year through 2030. It does not assign a new class to any particular unit.
Rezoning works the other way. Bill 88, now Ordinance 6008, created the H-3 and H-4 hotel districts effective June 22, 2026. Under the same tax code section, dwelling units in the hotel district default to TVR-STRH unless they qualify as long-term rental, commercialized residential, apartment or owner-occupied. A complex that wins hotel zoning keeps its nightly rental income and stays in the $13 to $17 tax bracket. A complex that is denied loses the rental use, and its owners move toward the lower residential classes. In both cases the owner's tax rate is decided by the rezoning outcome.
Lower Honoapiilani Road, One Address at a Time
On September 22, 2026, the Maui Planning Commission recommended approval for only five of 48 properties in the first referral, Maui Now reported. Commissioners recommended denying the leasehold properties and the mixed timeshare properties because those buildings held potential for housing. They also recommended denying the properties described as "operating like hotels" because they wanted more objective standards for what counts as a hotel. Vice Chair Andrea Kealoha told the paper, "My goal is trying to figure out what we can use for housing."
These are the West Maui complexes in that batch, with addresses from the County Planning Department's September 22 memo:
| Complex | Lower Honoapiilani Rd address | Category | Commission recommendation |
|---|---|---|---|
| Hono Koa | 3801 | All timeshare, 28 units | Approve |
| Maui Sands I and II | 3559 | Leasehold | Deny |
| Hale Mahina Beach Resort | 3875 | Leasehold | Deny |
| Kahana Outrigger | 4521 | Leasehold | Deny |
| Kahana Village | 4531 | Leasehold | Deny |
| Kuleana | 3959 | Timeshare and leasehold mix | Deny |
| Paki Maui I, II and III | 3601 and 3615 | Timeshare and leasehold mix | Deny |
| Mahina Surf | 4057 | Operating like a hotel | Deny |
| Papakea | 3543 | Operating like a hotel | Deny |
The commission's recommendations are not final. The Council needs six of its nine votes to pass a bill the commission recommended against, according to Maui Now's September 30 report. That same article reports that the Council voted 5-4 to send a second batch of 32 shoreline complexes to the commission. The second batch qualified because more than half of each building's footprint lies in the sea level rise exposure area, a special flood hazard area or the shoreline setback area. Its West Maui list includes Kahana Reef at 4471 and nine complexes in the Honokowai address range: Hale Kai I at 3695, Pikake at 3701, Makani Sands at 3765, Kaleialoha at 3785, Hale Ono Loa at 3823, Lokelani at 3833, Polynesian Shores at 3975, Mahinahina Beach at 4007 and Noelani at 4095. A floor amendment to add Nohonani at 3723 and Hoyochi Nikko at 3901 failed.
Buildings on the same road can therefore be headed for different tax futures. Hoyochi Nikko at 3901 is now outside both batches, while Hono Koa at 3801 has a favorable recommendation.
Who Has Been Buying So Far
Testimony at the September hearing gave the first early data on the trade-off between those futures. Speaking for the Office of Hawaiian Affairs, McKenna Woodward cited Department of Finance data as of July: 101 properties affected by Bill 9 had sold since the law took effect, and 25 of them went to local buyers. Caitlin Miller of the Maui Vacation Rental Association matched 162 affected sales between December 1, 2025 and August 14, 2026 against tax records. She found 12 confirmed as owner-occupied and nine more that appeared likely to be, and she told the commission, "It is still early." Maui Now carried both accounts.
For tax purposes, the owner-occupied count is the useful figure. It shows how many of these sales have reached the $1.65 owner-occupied class so far, as recorded in tax records through mid-August.
The Dates Between Now and the Rate Change
- November 24, 2026. Deadline for the Planning Commission to return the first batch of bills to the Council for a final decision.
- December 31, 2026. Filing deadline for both the home exemption and the long-term rental exemption. Under the County's home exemption FAQ, the tax change from a home exemption begins the following July 1.
- Pending, no date set. Bill 143, which would create a vacant residential tax class, was still assigned to the Budget, Finance and Economic Development Committee on the County's September 1, 2026 list.
- January 1, 2029. Transient vacation rental use ends in West Maui apartment districts unless a property has been rezoned. Two lawsuits challenging Ordinance 5909, Malter v. Maui County and Lynam v. County of Maui, were filed in December 2025 and asked the court to block enforcement, according to Maui Now.
Questions Buyers Ask
Does the tax on a listing sheet carry over to me? Only if you use the unit the same way the seller did and qualify for the same class. A home exemption or long-term rental exemption depends on the owner's own use and filing, so a change of owner can mean a change of class.
Does Napili have any complexes in either rezoning batch? The listed West Maui addresses run from 3543 to 4531 Lower Honoapiilani Road, which covers Honokowai and Kahana. No Napili address appears on the 32-property list.
If my building gets hotel zoning, will my taxes drop? Not automatically. Dwelling units in the hotel district default to TVR-STRH, so a rezoned unit that keeps renting nightly stays in that class unless it qualifies for an exempt one.
This post is general information, not legal, tax or financial advice. Please confirm how any classification or exemption applies to your own unit with a tax professional or the County's Real Property Assessment Division.
When we look at a Lower Honoapiilani Road condo with a client, we put the address next to the County's rezoning lists and the FY2027 rate table first, then talk about how the unit might be used. Our property management side at Vacation-Maui.com works through the same questions for owners already in these buildings. If you'd like to see what a specific Honokowai or Kahana address could cost you in tax under each class, Mark, Andy and Kristen at Mark Marchello can go through it with you. Start Your West Maui Home Search.