Military Home Source’s Property Management divisionworks closely to rent your home with care and knowledge. We want your home in the right hands when you leave. For more information on listing your rental, please contact Brandy at 808.489.5177.
Most people do not realize that you pay taxes on any money collected for the rent of your property at the rate of 4.72% Here is some quick facts on why.
1. If I rent out my house or a room in my house, does that mean I am in business?
Yes. If you receive rental income from renting out part or all of your house, condominium, apartment, second home, vacation home, or any other residential real property (“real property”) located in Hawaii, then you are engaging in a taxable business activity.
2. If I rent out my house, do I have to pay taxes?
Yes. If you rent out real property located in Hawaii for 180 days or more (long-term rental), then you are subject to Hawaii income tax and the general excise tax (GET). If you rent out real property located in Hawaii to a transient person for less than 180 consecutive days (shortterm rental), then you are subject to Hawaii income tax, GET, and the transient accommodations tax (TAT). For example, if you rent out your house for one weekend, the gross rental income is subject to the GET and TAT.
3. If I rent out my house to relatives such as my son and his family, do I have to pay taxes?
Yes. If you rent out real property located in Hawaii to your relatives, then you are subject to Hawaii income tax and the GET. If it is a short-term rental, then you are also subject to the TAT. However, if the accommodation is your relatives’ permanent place of residence, then it is not subject to the TAT.
4. What is the GET? The GET is a privilege tax imposed on business activity in the State of Hawaii. The tax is imposed on the gross income received by the person engaging in the business activity. Your gross income is the total of all your business income before you deduct any business expenses. Gross income includes any cost passed on to the customer such as the GET.
Here is a link to the Hawaii State Tax office regulations on listing: