What you need to know about Kauai TVR's and VDA's (Transient Vacation Rentals and Visitor De

Buying a dream second home or vacation home on Kauai and renting it out when you're not here to generate income is a great plan -- owners can generate significant revenue by listing their homes or condos on VRBO or with a property management company. EXCEPT, make sure you understand if the property you wish to buy is eligible/ has a legal right to participate in the short-term vacation rental program.

Make sure the property you are interested in is a Visitor Designated Area (VDA) and is also a designated (or could be designated), legal Transient Vacation Rental (“TVR”), as recognized by the Kauai County Code.

According to the Kauai County Code, a Transient Vacation Rental is, “a dwelling unit which is provided to transient occupants for compensation or fees, including club fees, or as part of interval ownership involving persons unrelated by blood, with a duration of occupancy of one hundred eighty (180) days or less.”

To expand further on this definition, the Kauai County Code identifies a “transient” occupant as, “any person who owns, rents or uses a dwelling unit or a portion thereof for one hundred eighty (180) days or less, and which dwelling unit is not the person’s primary residence under the Internal Revenue Code. This definition shall not apply to nonpaying guests of the family occupying the unit, patients or clients in health care facilities, full-time students, employees who receive room and/or board as part of their salary or compensation, military personnel, low-income renters receiving rental subsistence from state or federal governments, or overnight accommodations provided by nonprofit corporations or associations for religious, charitable, or educational purposes where no rental income is transacted.”

In short, any unrelated, paying renter of your property for a period shorter than 6 months would make them a “transient” occupant, and would cause your property to need to operate as a legal Transient Vacation Rental.

Visitor Destination Areas (VDA’s) are areas on Kauai where resort activity is permitted to occur. For the most part, there are three main VDA’s on Kauai, Princeville, Poipu and Kapaa. Princeville on the North Shore is the only community that is wholly a VDA while only parts of Poipu and Koloa on the South Shore are eligible. The East side of the island has smaller VDA’s in Waipouli/Wailua and Nawiliwili/Niumalu. Be sure you double check with the County of Kauai Planning Department about VDAs and TVRs and confirm the status with the County of Kauai Planning Department before purchasing a property.

In accordance with Ordinance #864, a Transient Vacation Rental is permitted to operate within a designated VDA, and is prohibited to operate outside of a designated VDA unless a Non-Conforming Use permit (NCU) is already in place.

It is important to note that while a property is located inside of a VDA, it may not yet be a registered Transient Vacation Rental. However, registering it is pretty simple.

A Transient Vacation Rental can operate outside of a VDA as long as a Non-Conforming Use (NCU) permit exists for the property. The NCU would have had to be obtained prior to March 30, 2009, as the County of Kauai will not issue a new NCU in an area outside of a VDA subsequent to that date.

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