By Benjamin Finnerty (S), REALTOR® (RS-83812) with Keller Williams Realty Maui · Kīhei, Maui · 808-481-9748

Quick Answer: Hotel-zoned condos on Maui can keep operating as vacation rentals because Bill 9 (Ordinance 5909) only phases out short-term rentals in apartment districts, by January 1, 2029 in West Maui and January 1, 2031 elsewhere. The tradeoff is financing: Fannie Mae’s guide, updated August 5, 2026, treats projects run like hotels as ineligible.

I’m Benjamin Finnerty, a REALTOR® in Kīhei with Keller Williams Realty Maui, and I focus on South Maui condos and short-term-rental zoning. Since Bill 9 passed, more buyers have been asking me specifically about hotel-zoned condos on Maui. They’re a real option for anyone who wants vacation rental use long term, but they come with their own rules, costs and loan limits. Here’s how I explain this property type.

What is a hotel-zoned condo on Maui?

A hotel-zoned condo is a condominium unit in a building that sits in one of Maui County’s hotel zoning districts, where transient vacation rental use is allowed by the zoning itself. That’s different from a Minatoya List condo, which sits in an apartment district and has operated as a vacation rental under a 2001 county legal opinion.

The distinction matters more than ever. Under Bill 9, signed December 15, 2025, vacation rental use in apartment-zoned Minatoya List buildings ends January 1, 2029 in West Maui and January 1, 2031 in the rest of Maui County. Hotel units are not part of that phase-out.

How do I confirm a condo’s zoning before I buy?

Get it in writing from the County, not from a listing description or rental website. A building’s zoning, community plan designation and any special conditions can be confirmed through the County of Maui Department of Planning. I also review the condo’s governing documents and house rules, since an association can restrict rentals even where zoning allows them.

Watch for buildings in transition. Bill 88 (Ordinance 6008), effective June 22, 2026, created two new hotel districts, H-3 and H-4, that some apartment-zoned complexes are trying to move into. When the Maui Planning Commission reviewed the first batch of 48 properties in September 2026, it recommended approval for only five, according to Maui Now. On September 29, 2026, the Council voted 5-4 to send 32 more shoreline complexes to the Planning Commission. I cover that batch in my post on the 32 shoreline condo complexes.

Status (as of October 10, 2026)	Vacation rental outlook
Existing hotel district	Not affected by Bill 9
Apartment district, Minatoya List	Phase-out by Jan. 1, 2029 (West Maui) or Jan. 1, 2031 (elsewhere) unless rezoned
Apartment district, proposed for H-3/H-4	Pending Planning Commission review and Council action

Can I get a conventional mortgage on a hotel-zoned condo?

Often not. Fannie Mae’s Selling Guide topic on ineligible projects (B4-2.1-03, dated August 5, 2026) says a project may not be operated or managed as a hotel, motel or similar commercial entity. It flags features like registration services, daily cleaning, mandatory rental pools, and rental pooling or revenue-sharing agreements. The guide also cites Freddie Mac’s requirements, which make projects with condo hotel, resort, transient or short-term rental activity ineligible.

Not every hotel-zoned building has a front desk or rental pool, so eligibility depends on how the specific project operates. But many buyers of these units pay cash or use portfolio or other non-conventional loans, which usually have different down payment and rate terms. I’d talk with a lender who knows Maui condo projects before you write an offer. My post on Fannie Mae and Freddie Mac condo rule changes covers the broader condo review rules that took effect this year.

What taxes and fees apply to a hotel-zoned vacation rental?

Short-term rental income on Maui is generally subject to the 11% state Transient Accommodations Tax, the 3% Maui County TAT and the 4.5% general excise tax, as of January 1, 2026. That’s about 18.5% of gross rent on most stays under 180 days. I go through the details in my guide to Maui vacation rental taxes.

Property tax class depends on how the County classifies the unit, and vacation rental and hotel classes are taxed at higher rates than owner-occupied homes. Check the unit’s current classification with the County Real Property Assessment Division. Then add association dues, any on-site rental program fees, and insurance to get a true monthly cost.

Hotel-zoned vs. Minatoya List condos: how do they compare?

Factor	Hotel-zoned condo	Minatoya List condo (apartment-zoned)
Vacation rental after Bill 9 deadline	Allowed by zoning	Ends unless rezoned
Conventional (Fannie/Freddie) loan	Often ineligible if run like a hotel	Depends on project review
Long-term residential use	Depends on building rules	Allowed
Main risk to underwrite	Financing, fees, rental program terms	Zoning timeline

My Take: What I’m Telling Buyers and Sellers

If long-term vacation rental use is the heart of your plan, a hotel-zoned condo removes the biggest uncertainty on Maui right now, which is the Bill 9 deadline. But I’d underwrite it as a business, not a home. Ask for at least two years of actual rental statements, the full fee schedule of any rental program, the association budget and reserve study, and any pending special assessments.

Financing is the other gate. Talk to a lender early and confirm in writing that the specific project fits their loan program, since a “condo” label doesn’t mean it qualifies for a conventional loan. If you’re selling a Minatoya unit to buy a hotel-zoned one, a 1031 exchange may be worth discussing with your CPA. I wrote about that in my post on 1031 exchanges for Maui condo owners.

For sellers of hotel-zoned units, have your zoning confirmation, rental history and association documents ready before you list. Buyers increasingly ask for them up front.

This is general information, not tax or legal advice. Confirm with a CPA or Hawaiʻi attorney.

Frequently Asked Questions

Does Bill 9 affect hotel-zoned condos on Maui?
No. Bill 9 phases out vacation rentals in apartment districts. Hotel units are not part of the phase-out.

Can I use a Fannie Mae loan on a Maui condo hotel?
Usually not. Fannie Mae’s guide treats projects operated like hotels, with features like registration desks, daily cleaning or rental pools, as ineligible.

What are the H-3 and H-4 districts?
New hotel districts created by Bill 88 (Ordinance 6008), effective June 22, 2026. Some apartment-zoned complexes are seeking rezoning into them.

How much tax is due on Maui vacation rental income?
About 18.5% of gross rent on most stays under 180 days: 11% state TAT, 3% Maui County TAT and 4.5% GET, as of January 1, 2026.

How do I verify a condo is hotel-zoned?
Confirm with the County of Maui Department of Planning and review the condo’s governing documents.

Ask Benjamin

If you’re comparing hotel-zoned and apartment-zoned condos, I’m happy to help you sort through zoning, financing and the numbers. I’m Benjamin Finnerty. Call or text 808-481-9748 or email benjamin@the808team.com.

Sources: Fannie Mae Selling Guide B4-2.1-03 (Aug. 5, 2026); County of Maui (Bill 9, Ordinance 5909); Maui County Council; Maui Now; Hawaiʻi Department of Taxation.