How Oahu Classifies STR Properties for Tax Purposes
Property taxes on Oahu are based on your property’s tax classification, which is determined by how the property is used—not just its zoning. If you operate a short-term rental, your property will be classified differently than an owner-occupied home or a long-term rental, and you will pay significantly higher property tax rates.
This is post five in our Oahu Short-Term Rental Guide series. For a breakdown of income-based taxes (GET, TAT, OTAT), see our STR tax guide.
Oahu Property Tax Classifications for Rental Properties
The City and County of Honolulu uses several property tax classifications that apply to rental properties. The one that applies to your STR depends on the type of property and how it is used:
- Transient Vacation (TVU) – For properties operating as short-term vacation rentals with a NUC or in eligible zones
- Hotel and Resort – For properties in hotel/resort-zoned areas operating as STRs
- Bed and Breakfast Home – For owner-occupied properties renting rooms short-term
- Residential A – For non-owner-occupied residential properties (applies if you are not using the property as an STR but not living in it)
Current Property Tax Rates (FY 2025–2026)
The following rates are per $1,000 of net taxable assessed value, effective July 1, 2025 through June 30, 2026:
| Classification | Rate per $1,000 | Effective Rate |
|---|---|---|
| Owner-Occupied Tier 1 (≤$1M) | $1.65 | 0.165% |
| Owner-Occupied Tier 2 ($1M–$3M) | $1.80 | 0.180% |
| Residential A Tier 1 (≤$1M) | $4.00 | 0.400% |
| Residential A Tier 2 ($1M–$3M) | $11.40 | 1.140% |
| Transient Vacation Tier 1 (≤$800K) | $9.00 | 0.900% |
| Transient Vacation Tier 2 (>$800K) | $11.50 | 1.150% |
| Hotel and Resort | $13.90 | 1.390% |
| Bed and Breakfast Home | $6.50 | 0.650% |
What STR Owners Actually Pay: Examples
Let’s look at what these rates mean in real dollars for typical Oahu STR properties:
Example 1: Waikiki Condo with NUC – Assessed at $600,000
- Classification: Transient Vacation Tier 1
- Rate: $9.00 per $1,000
- Annual property tax: $5,400
- Compare to owner-occupied: $990 (Tier 1 at $1.65)
Example 2: Ko Olina Beach Villa – Assessed at $1,200,000
- Classification: Hotel and Resort
- Rate: $13.90 per $1,000
- Annual property tax: $16,680
- Compare to owner-occupied: $1,650 (Tier 1) + $360 (Tier 2 on $200K) = $2,010
Example 3: Waikiki Condo with NUC – Assessed at $900,000
- Classification: Transient Vacation (split tiers)
- Tier 1: $800,000 × $9.00/$1,000 = $7,200
- Tier 2: $100,000 × $11.50/$1,000 = $1,150
- Annual property tax: $8,350
How STR Property Tax Compares to Other Classifications
The difference is dramatic. An STR property pays 5 to 8 times more in property taxes than the same property would if it were owner-occupied:
- Owner-occupied: $1.65–$1.80 per $1,000 (lowest rates on Oahu)
- Long-term rental: Not a separate classification on Oahu; typically falls under Residential A at $4.00–$11.40 per $1,000
- Transient Vacation: $9.00–$11.50 per $1,000
- Hotel and Resort: $13.90 per $1,000 (highest rate on Oahu)
This property tax premium is one of the biggest ongoing costs of operating an STR on Oahu and must be factored into any profitability analysis.
Recent Changes to STR Property Tax Rates
Honolulu has been increasing property tax pressure on STRs in recent years:
- July 2024: The Transient Vacation classification rates were raised to $9.00/$11.50 per $1,000 (up from $4.00 for all values prior to the reclassification)
- The tiered structure with the $800,000 threshold was also introduced at this time
- These increases reflect the City’s policy of discouraging STRs in favor of long-term housing
How Your Property Gets Classified
The Real Property Assessment Division (RPAD) determines your property’s tax classification based on its actual use. If you register an STR with the DPP or hold a NUC, your property will be reclassified accordingly. Key points:
- Classification is based on actual use, not just zoning
- If you stop operating as an STR, you can apply to have your classification changed
- Properties in hotel-zoned areas are automatically classified as Hotel and Resort
- NUC properties in residential zones are classified as Transient Vacation
Property Tax and Your STR Profitability
When evaluating whether an STR investment makes financial sense, property tax is often the single largest fixed cost after your mortgage. Combined with the 18.7% income tax burden from GET, TAT, and OTAT, the total tax load on Oahu STRs is substantial.
For a full financial analysis, see our upcoming post on STR profitability modeling.
Continue the Oahu STR Guide Series
This post is part of our comprehensive series on short-term rentals on Oahu. Explore the full series:
- Short-Term Rentals on Oahu in 2026: Overview
- Where You Can Legally Operate an STR on Oahu – Zoning Explained
- NUCs on Oahu: What Buyers and Owners Must Know
- Every Tax You Pay as an Oahu STR Owner (GET, TAT, OTAT)
- Oahu STR Property Tax Rates for 2025–2026 (You are here)
- Is an Oahu STR Actually Profitable? Financial Modeling
- How to Register Your STR Step by Step
- STR Insurance and Liability
- Operating Rules: Noise, Parking, Advertising
- Enforcement, Fines, and How the City Catches Illegal Rentals
- Condo STRs: HOA Rules and AOAO Restrictions
- Mid-Term Rentals (30–89 Days): The Alternative Strategy
- How to Buy an STR Property on Oahu
- Selling a Property with an STR Permit or NUC
- The Future of STRs on Oahu
Questions About STR Property Taxes on Oahu?
Understanding the true cost of owning an STR is critical before you buy. Our team helps buyers and sellers across Oahu evaluate properties with STR potential every day.
Contact Kristy and Austin to start the conversation, or visit our home buying page to learn more about purchasing property on Oahu. You can also explore listings in our featured communities including Ho’opili, Kapolei, Waikiki, and Ko Olina.