Traditionally, property owners that lived outside of Hawaii were able to list their vacation rental property on a website and manager it independently, as with other U.S. properties. The new bills, SB 2089 and SB2078, and HB 1706 and HB1707, would require non-owners of Hawaiian vacation rentals to hire local property managers to manger their homes and collect revenue. Local Hawaiian property managers helped push the legislation along thus far, arguing some non-resident owners were avoiding paying proper taxes.
But the critics have been becoming more vocal, including property owners that said they’d have to raise rental rates to meet the greater management costs. Local on-island investors in vacation rentals would be exempt from the bills and their provisions. Gregory Kugle, the attorney for Hawaiian Vacation Rental Owners Assocation, wrote a letter in opposition to the bills on constitutional grounds. A Vancouver Sun column Monday by BC-based Maui property owner Adam Leamy called the legislation a “grab for cash” and a bid for a monopoly.
“This is no time for free-trade welchers,” he wrote. “If individual citizens of Canada and the United States made cross-border investments, only to see themselves the focus of targeted operational requirements and costs after the investment has been made, NAFTA would be discredited within both countries at its most basic, grass-roots level.”
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