Honolulu prepares guidelines to register as B&B homes

The city Planning and Permitting Department is drafting rules to allow for the fall registration of new bed-and-breakfast homes, defined as rentals of less than 30 days where an owner or operator is present during the stay.

City ordinance 19-18 requires the department to begin the registration process on Oct. 1, said DPP spokesman Curtis Lum.

“The rules are being drafted. We will hold a public hearing prior to adopting the rules,” Lum said.

The ordinance allows for up to 1,700 new rentals in non-resort districts islandwide. Determining how the list gets filled will be part of the rule-making process, but Lum said the “ordinance allows for a lottery system.”

Another major issue to be determined is the tax rate that newly registered bed-and-breakfast homes will pay. Ordinance 19-32, which Mayor Kirk Caldwell signed in December, created a new bed-and-breakfast property tax classification.

It was in sync with Bill 55, which was approved by the City Council in December, and places transient vacation units, or TVUs, into the existing hotel-resort category, currently $13.90 per $1,000 of value. The city defines TVUs as rentals of less than 30 days where an owner or operator is not present.

Lum said that the bed-and-breakfast “tax rate has yet to be determined.”

But it’s assumed that owners will be taxed at a rate higher than $3.50 per $1,000 of assessed value — the current rate for owner-occupied residential properties.

Vacation rental units in residential homes that were permitted before 1989 will continue to pay residential tax rates.