Kaunakakai, Hawaii Short Term Rental Regulations Guide for Airbnb hosts

Overview: Are Short-Term Rentals Allowed in Kaunakakai, HI?

Yes, short-term rentals are allowed in Kaunakakai, HI, but under strict regulatory conditions. Kaunakakai, located on Molokai Island, falls under Maui County's short-term rental regulations. The market has high regulation levels with permit caps and specific operating requirements that investors must navigate carefully.

Short-term rentals in Kaunakakai operate under Maui County's "Short-Term Rental Home" (STRH) framework, which allows single-family residences to be rented for less than 180 consecutive days. However, the regulatory environment is notably restrictive, with only a limited number of permits available and stringent operational requirements.

What do Airbnb hosts actually earn in Kaunakakai?

Kaunakakai hosts earn a median $23,731/year with $167 ADR and 54% occupancy.

Top performers pull in $33,760+ per year.

See the full Kaunakakai market breakdown

How to Start a Short-Term Rental Business in Kaunakakai

Step 1: Zoning and Permit Verification

Confirm zoning eligibility: Your property must be located in a district where STRs are permitted
Check permit availability: Kaunakakai falls under the Molokai Community Plan Region, which has specific permit caps
Verify non-conforming status: Some properties may have grandfathered rights if operating before specific dates

Step 2: State Tax Registration

Register for GET License: General Excise Tax license ($20 registration fee)
Register for TAT License: Transient Accommodations Tax license ($5 for 1-5 units, $15 for 6+ units)
Obtain Hawaii Tax Identification Numbers: Separate numbers for GET and TAT

Step 3: County Permit Application

Apply for STRH Permit: Submit comprehensive application through Maui County Planning Department
Designate Manager: Appoint a designated manager available by telephone at all times, able to arrive onsite within one hour
Meet operational requirements: Ensure compliance with all Maui County STRH regulations

Step 4: Compliance Setup

Obtain liability insurance: Minimum $1,000,000 in general liability coverage
Prepare required documentation: Site plan, floor plan, compliance statements
Establish operational procedures: Parking, advertising, and guest management protocols

Required Documents, Permits, Licenses, and Guidelines

State-Level Requirements

Form BB-1: State of Hawaii Basic Business Application
GET License: General Excise Tax registration
TAT License: Transient Accommodations Tax registration
Hawaii Tax ID Numbers: Separate identification for GET and TAT
Federal EIN: Employer Identification Number
Liability Insurance Certificate: $1M minimum coverage

County-Level Requirements (Maui County)

STRH Permit Application: Short-Term Rental Home permit
Property ownership verification: Title report or deed
Site plan: Property boundaries, structures, parking, easements
Floor plan: Room identification and maximum occupancy
Designated manager information: Contact details and availability confirmation
Community plan compliance: Verification of Molokai region requirements
Fire safety compliance: Fire extinguisher and safety equipment documentation

Operating Documentation

House rules: Clear guest guidelines and restrictions
Emergency contact list: 24/7 availability requirements
Parking plan: Onsite parking verification (no street parking permitted)
Waste disposal instructions: Trash collection and disposal protocols
Compliance statement: Signed attestation of regulatory adherence

Specific Regulations: City, County, and State Level

State of Hawaii Regulations

Definition: STRs are transient accommodations rented for less than 180 consecutive days
Tax Requirements:
- GET: 4% state rate plus 0.5% county surcharge
- TAT: 10.25% state rate plus county TAT
Registration: Mandatory GET and TAT licenses for all STR operators
No statewide permit system: Counties handle local licensing and permits

Maui County Regulations (Applies to Kaunakakai)

Permit Type: Short-Term Rental Home (STRH) permits for single-family residences
Duration Limit: Rentals must be for less than 180 consecutive days
Manager Requirement: Designated manager must be available by telephone and able to respond onsite within one hour
Parking Restrictions: All parking must be onsite; no street parking permitted
Advertising Requirements: All advertising must include STRH permit number
Capacity Limits: STRH operations may have up to 6 bedrooms distributed over 2 licensed STRH dwellings

Kaunakakai (Molokai) Specific Regulations

Community Plan Region: Subject to Molokai-specific permit caps and requirements
Limited Permit Availability: As of the latest data, 16 STRH permits have been issued in the Kaunakakai area
Operational Standards: Must comply with all Maui County STRH operational requirements
No New Non-Conforming Rights: Properties not grandfathered cannot obtain new non-conforming status

Recent Regulatory Changes

Senate Bill 2919 (2024): Empowers counties with greater authority to regulate STRs
County Authority: Maui County can now regulate time, place, manner, and duration of STR operations
Potential Phase-Outs: Counties can amortize or phase out STR uses in residential or agricultural zones

Contact Information

Maui County Planning Department

Address: 2200 Main Street, Suite 315, Wailuku, HI 96793
Phone: (808) 270-7735
Fax: (808) 270-7634
Website: www.mauicounty.gov

Maui County Tax Office

Address: 2100 Imi Kala Street, Suite 101, Wailuku, HI 96793
Phone: (808) 270-7697
Website: www.mauicounty.gov

Hawaii Department of Taxation

Molokai District Office:

Address: 35 Ala Malama Street, Room 101, Kaunakakai, HI 96748
Phone: (808) 553-5541
Fax: (808) 553-9878
General Tax Information: (808) 587-4242
Website: tax.hawaii.gov

Maui County Department of Finance

Address: 200 S. High Street, Wailuku, HI 96793
Phone: (808) 270-7564
Website: www.mauicounty.gov

Market Performance and Investment Considerations

Current Market Metrics

Active Listings: 72 properties (as of 2025)
Average Daily Rate: $183
Occupancy Rate: 34.1%
Median Annual Revenue: $15,975
Revenue Growth: 12.0% year-over-year

Investment Implications

High Regulation Environment: Strict compliance requirements may limit supply
Seasonal Performance: Peak season in February, low season in November
Permit Scarcity: Limited permits available in Kaunakakai area
Operational Complexity: Strict manager availability and parking requirements

Source References

Important Note: This guide reflects regulations as of the provided sources. Short-term rental laws in Hawaii are subject to frequent changes, particularly following recent legislative updates. Investors should verify current requirements with Maui County authorities and consult with local real estate attorneys before making investment decisions.

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Ask the AI Advisor about Kaunakakai

Kaunakakai is a small, unincorporated community on the south coast of Molokai, one of the less-developed main Hawaiian Islands. Although Molokai is administratively part of Maui County, Kaunakakai itself functions as the island's de facto hub, with a population of roughly 3,000 residents clustered along a single stretch of highway facing the channel toward Maui. The town carries a distinctly old-Hawaii feel, with a working harbor, a single main street, locally owned storefronts, and a noticeably slower pace than the busier islands of Oahu or Maui. It is best known as the gateway to the rugged landscapes of central and eastern Molokai and to the historically significant Kalaupapa peninsula on the island's northern coast. The nearest major city is Honolulu, situated on Oahu across the Pailolo Channel roughly 90 miles to the east; there is no road or bridge connecting the islands, so reaching Kaunakakai typically involves a short commuter flight or a ferry ride from Lahaina on Maui.

A short walk from most of the town's lodging brings visitors to the Kaunakakai Wharf, the longest pier in the Hawaiian Islands and a working harbor where fishing boats unload their catch. The wharf and the small commercial strip behind it form the heart of the community, and Friday evenings often bring a lively fish auction that draws both locals and travelers. From here, Highway 450 west runs along the coast toward several of the island's most recognizable natural sites.

About an hour's drive east of town, Halawa Valley Beach Park sits at the foot of a lush valley that has been continuously inhabited for centuries. Hiking into the valley is permitted only with a local guide, and the reward is a pair of tall waterfalls and a black-sand beach that sees relatively few visitors. The drive itself, which crosses one-lane bridges and winds past taro patches and rolling牧场, is widely considered one of the most scenic in the state.

Further west along the same coastal road lies Papohaku Beach Park, approximately a 20-minute drive from Kaunakakai, which is one of the longest stretches of white sand in Hawaii. Because Molokai receives far fewer visitors than its neighbors, the beach often feels nearly empty even on weekends, giving short-term rental guests a sense of seclusion that is increasingly rare in the islands.

In the opposite direction, the Kalaupapa National Historical Park sits at the base of some of the world's tallest sea cliffs, about a 30-minute drive to the trailhead followed by either a guided mule ride, a steep footpath, or a small-plane flight into the peninsula. The site preserves the former Hansen disease settlement associated with Father Damien and Saint Marianne Cope, and tours offer a quiet, reflective experience that contrasts with the resort atmosphere of the other islands.

Kaunakakai's appeal for short-term rental guests lies precisely in what it lacks: traffic, high-rise development, and crowds. Its central location on the island, its proximity to a working harbor and a genuine small-town main street, and its easy reach of three very different coastlines make it a natural base for travelers who want to experience the quieter side of Hawaii while still enjoying a comfortable place to return to in the evenings.