Aloha, my name is Syed Sarmad and I’m the Principal Broker for Advantage Vacation. Advantage Vacation is a licensed real estate company in Hawaii and we specialize in timeshare resales. Our offices are located in the Lahaina Cannery Mall in Lahaina, Maui.
Today I would like to talk about taxes on timeshares in Hawaii. There are two types of taxes on timeshares here in Hawaii. Timeshare owners pay a property tax which is included in their annual fees. The other tax is called a “transient accommodations tax” which is paid in one of two ways.
If a timeshare owner is staying at their property or an exchange guest is coming in through RCI or Interval International or any other external exchange company or a timeshare guest is staying at the property – then they pay what is called a “transient occupancy tax” when they check out. This transient occupancy tax is calculated on the following basis – what they do is take the annual maintenance costs (annual fee of that unit) divide it by 2 and then they divide it by the number of days you stayed there and then multiply it by 10.25% to arrive at the transient occupancy tax rate.
Recently I called the Hawaii State office and asked them what the difference is between the “transient occupancy tax” and the “transient accommodations tax”. I was told the transient occupancy tax really falls under the transient accommodations tax – it’s just that the occupancy tax is paid by a timeshare owner or an exchange guest when they stay at the property. A transient accommodations tax is paid when the timeshare owner rents their timeshare property out to another individual – then the owner is required to file a tax (actually two types of taxes) to the State of Hawaii.
They are supposed to pay a general excise tax or what’s called GET and a transient accommodations tax which is 10.25%. The GET (general excise tax) is 4% of the gross rental income. So when a timeshare owner is renting his property out, then he is required to file for a GET tax number and also for a transient accommodations tax number. These are two separate numbers and once they have filed for these tax numbers they are required to file a GET form and a TAT form declaring those taxes.
I hope this information has been helpful to you.
For additional information about timeshare resales, check out our video and blog resources:
Video:
Hawaii Timeshare Taxes Explained
Blog articles:
Why you should use a real estate broker in Hawaii when buying or selling a timeshare in Hawaii
Syed Sarmad, Principal Broker for Advantage Vacation
