Second-Home Buying in Kailua-Kona, Hawaii: Guide

Kailua-Kona generates more second-home transactions than any other market on Hawaiʻi Island, with properties ranging from ocean-view condominiums along Ali'i Drive to resort estates on the Kohala Coast, across price points spanning mid-range condos to multi-million-dollar luxury residences. If you are evaluating a second home on the Big Island in 2026, Kailua-Kona and its surrounding communities, Keauhou, Mauna Lani Resort, Waikoloa Beach Resort, and Mauna Kea Resort, each carry distinct ownership structures, tax classifications, and short-term rental rules that will shape your decision as much as the property itself.

This guide covers the decisions that carry the most weight: ownership type, property tax classification for non-owner-occupied properties, financing realities, and the current state of vacation rental regulation in Hawaii County.

Why Kailua-Kona and the Kohala Coast Attract Second-Home Buyers

Kailua-Kona draws the largest share of second-home activity on Hawaiʻi Island, anchored by its dry west-side climate, the concentration of resort infrastructure along Ali'i Drive and Keauhou, and direct mainland flight access through Kona International Airport, all of which make lock-and-leave ownership practical in a way few other island markets can match.

Keauhou sits immediately south of Kailua-Kona town, functioning as an integral part of the Kona market rather than a separate destination. Together, they offer proximity to dining on Ali'i Drive, access to Honokohau Small Boat Harbor, and a range of condominium communities suited to second-home buyers. North along the coast, the Kohala Coast resort corridor contains three planned communities that buyers consistently seek by name: Mauna Lani Resort, Waikoloa Beach Resort, and Mauna Kea Resort. Each offers a distinct ownership experience, from Waikoloa's more accessible entry prices to the private estate lots within Mauna Kea.

For buyers comparing communities across this corridor, the luxury community comparison for Kona and the Kohala Coast lays out the key differences side by side.

Property Types and Price Points for Second-Home Buyers

Second-home buyers in Kailua-Kona and the Kohala Coast work across a meaningful price range, and the right property type depends as much on intended use as on budget.

Condominiums along Ali'i Drive and in Keauhou represent the most common entry point into this market. These range from compact one-bedroom units to two- and three-bedroom residences with ocean views. Through the first half of 2026, the Kailua-Kona condo segment has seen downward pressure on median pricing and expanded buyer negotiating leverage, according to aggregated MLS listing data (year-to-date through June 2026). Buyers evaluating condominiums should account for HOA fees, the building's master insurance policy (a significant and variable cost in Hawaii), and whether the project qualifies for conventional financing, a point covered in the financing section below.

Single-family homes in the Kailua-Kona area have carried a year-to-date median of approximately $1.25 million through mid-2026, down modestly from the same period in 2025, according to aggregated MLS listing data (year-to-date through June 2026). The upper end of this segment extends well beyond $2 million for ocean-view lots and estate properties closer to the coast.

Resort community residences at Mauna Lani Resort, Waikoloa Beach Resort, and Mauna Kea Resort span from resort-zoned condominiums priced at the upper mid-range to oceanfront estates in the multi-million-dollar tier. Each community carries its own CC&Rs, HOA fee structure, and zoning designations that directly affect permitted use, tax classification, and short-term rental eligibility.

Check the Kailua-Kona Real Estate page and West Side Real Estate listings that reflect what is on the market. To provide a broader context on upper-tier conditions across the island, read through our Big Island Luxury Market Report.

Fee Simple vs. Leasehold: What Second-Home Buyers Must Confirm First

Every listing in Kailua-Kona and across the Kohala Coast carries one of two ownership structures, and confirming which applies should be the first question asked before evaluating any property in depth.

Fee simple ownership means you own both the land and the improvements on it outright. This is the standard structure for the large majority of residential and resort community properties on the west side of the Big Island. Fee simple properties finance more easily, appreciate more predictably, and resell without the complications that affect leasehold titles.

Leasehold means you own the structure or unit but lease the underlying land from a separate landowner (often a trust, estate, or institutional entity) under a fixed-term ground lease with annual ground rent and a defined expiration date. Leasehold properties carry a lower upfront price, but that discount reflects genuine risks: financing that is harder to obtain (most lenders require the remaining lease term to exceed the loan term by a meaningful margin), ground rent that escalates per the lease schedule, and a ceiling on long-term value as the expiration date approaches.

On the Big Island, leasehold is most common in agricultural zones in South Kona. It appears less frequently in the Kailua-Kona condominium and resort community markets, but it does exist and must be verified on every listing before making an offer.

For second-home buyers, leasehold can make sense for a condominium you plan to use for a defined number of years with no expectation of long-term equity growth. For buyers who want a property that holds or builds value, fee simple is nearly always the more durable structure.

Hawaii also recognizes several ways to hold title beyond individual ownership. Joint tenancy, tenancy in common, revocable living trusts, and LLCs each carry different implications for estate planning and ownership transfer. The Common Ways to Hold Title in Hawaii page covers these structures and is worth reviewing before closing.

Financing a Second Home in Kailua-Kona

Second-home financing operates under a different set of standards than primary residence financing, and the Kona and Kohala Coast market adds several layers that buyers coming from the mainland often do not anticipate.

Down payment and qualification thresholds. Conventional second-home loan programs typically require a minimum of 10% down for buyers with strong credit profiles, with 20% or more common for jumbo loan amounts. Lenders classify a second home as a higher-risk asset than a primary residence, so debt-to-income thresholds, reserve requirements, and credit score minimums tend to be stricter.

Jumbo financing is the norm on the west side. For 2026, the Federal Housing Finance Agency has set the conforming loan limit for Hawaii County at $1,249,125 for a single-unit property, the maximum figure established by federal statute for Hawaii, well above the national baseline of $832,750 but still below the price of a substantial share of Kailua-Kona single-family homes and most Kohala Coast resort community transactions. Properties above that limit require jumbo loan programs with their own qualification standards and lender requirements.

Non-warrantable condominiums. A meaningful portion of Hawaii condo projects do not meet Fannie Mae or Freddie Mac warrantability standards. Common reasons include high investor concentration in the building, pending litigation at the association level, or significant short-term rental activity among units. Non-warrantable condos cannot be financed through conventional secondary-market lenders.

Portfolio lenders (banks that hold loans on their own books) are the appropriate product, and several Hawaii-based banking institutions specialize in exactly this type of financing. Confirming warrantability status should happen early in the evaluation process, before significant due diligence time is invested in a specific unit.

Cash transactions. All-cash purchases represent a significant share of closings in the resort communities on the west side. Buyers targeting the upper tier of the Kohala Coast market should be prepared for a competitive environment where cash offers carry weight.

Local lenders with market experience. Local Hawaii financial institutions have familiarity with asset types that national lenders routinely struggle to underwrite: leasehold properties, non-warrantable resort condos, and hotel-zoned units. Working with a lender who has closed comparable transactions on the west side of the Big Island reduces timeline uncertainty and limits late-stage financing surprises.

Use our Mortgage Calculator as a useful starting point for modeling monthly carrying costs at various price points and down payment amounts before engaging a lender.

Property Taxes for Non-Owner-Occupied Properties in Hawaii County

Property tax classification is one of the most consequential financial variables for second-home buyers in Hawaii County, and it is routinely underestimated by buyers who research only the headline statewide rate.

Hawaii County administers its own property tax system, independent of the State of Hawaiʻi, with rates applied per $1,000 of net taxable assessed value and structured by property classification. The classifications relevant to most second-home buyers, under the Hawaii County fiscal year 2026-27 rate schedule (Resolution 574-26, adopted May 21, 2026, as reported by Big Island Now on May 22, 2026), are as follows:

Classification	Rate per $1,000 of Assessed Value
Homeowner (primary residence, owner-occupied 200+ days/year)	$5.75
Residential, Non-Owner-Occupied (on the first $2M of assessed value)	$11.10
Residential, Non-Owner-Occupied (on the portion between $2M and $4M)	$15.00
Residential, Non-Owner-Occupied (on any portion above $4M)	$17.00
Hotel / Resort	$11.55

Note: The Tier Two rate is $15.00 per $1,000 (raised from the prior $13.60), not $14.50 as some secondary sources report: confirmed directly against West Hawaii Today, Hawaii Tribune-Herald, Honolulu Star-Advertiser, and Big Island Now's reporting on Resolution 574-26's May 21, 2026 passage.

A second home does not qualify for the homeowner classification or the associated homeowner exemption. The homeowner rate requires the property to be your principal residence, occupied for more than 200 days per year. By definition, a second home does not meet that standard.

The rate structure is progressive: each rate applies only to the portion of assessed value within that band, not to the full assessed value. On a property assessed at $3 million, the first $2 million is taxed at $11.10 per $1,000 and the next $1 million at $15.00 per $1,000. On a $1.5 million property classified as non-owner-occupied residential, the annual tax bill runs approximately $16,650 (this example falls entirely within Tier One, so it is unaffected by the Tier Two correction above). Resort-zoned condominiums operated as transient accommodations often fall under the Hotel/Resort classification at $11.55 per $1,000, which is lower than the upper non-owner-occupied tiers but still well above the homeowner rate.

The 2026-27 rate schedule raised the Tier Two rate from $13.60 to $15.00 for assessed value between $2 million and $4 million, and introduced a new Tier Three at $17.00 for any portion above $4 million. Any cost projections built on the prior two-tier table, or on an outdated $14.50 Tier Two figure, will be understated for properties in that range.

Tax classification follows actual use, not stated intent. Buyers planning to rent a property short-term should confirm the applicable classification with the Hawaii County Real Property Tax Division before closing.

Use our Affordability Calculator to help model total carrying costs across different purchase price scenarios before you engage a lender or make an offer.

Short-Term Vacation Rental Rules in Kailua-Kona and the Kohala Coast

The short-term rental environment on Hawaiʻi Island has changed materially in the past two years. Buyers purchasing with rental income expectations should treat zoning and permit verification as non-negotiable due diligence steps, not post-closing tasks.

Where transient vacation rentals are permitted. Hawaii County defines transient vacation rentals (TVRs) as rentals of fewer than 180 consecutive days. The county permits unhosted TVRs in resort-zoned and hotel-zoned areas. The resort communities on the Kohala Coast, including Waikoloa Beach Resort, Mauna Lani Resort, and Mauna Kea Resort, contain units that are properly zoned for this use. Many condominium buildings within Kailua-Kona and Keauhou are similarly situated in zones that allow TVRs, but the determination is property-specific. Zoning must be verified at the Tax Map Key (TMK) level through the Hawaii County Planning Department (planning.hawaiicounty.gov/resources/transient-vacation-rentals).

Registration requirements under Ordinance 25-50. Ordinance 25-50 established a countywide TVR registration framework, with the registration system having opened September 1, 2026. Registration fees are $500 initial and $250 per year for unhosted rentals, and $250 initial and $100 per year for hosted rentals. Registration is not a permit and does not change zoning: a property that is not in an allowed area and does not already hold a qualifying approval cannot be legalized through registration alone.

A separate bill (Bill 175) that would give the Planning Director authority to delay enforcement of registration requirements through December 31, 2026 passed its second council reading on September 2, 2026; confirm its current enacted status with the Hawaii County Planning Department before relying on any grace period.

HOA restrictions layer on top of zoning. Even in zones where county rules permit short-term rentals, a condominium association's CC&Rs may prohibit them. These restrictions are enforced at the association level and are not reflected in county zoning records. Request and review the full CC&R document and recent meeting minutes before closing if TVR use is part of your plan.

Registration and NUC status at purchase. Under Ordinance 25-50, a TVR registration expires 90 days after a change in ownership. The new owner must complete registration under their own name within that window or the property is treated as unregistered. Properties with a Nonconforming Use Certificate (NUC) can continue operating if the new owner promptly updates ownership records, keeps the NUC current through required renewals, and completes the new TVR registration. Do not treat an existing NUC, a prior STVR registration, or a history of rental income as something that transfers automatically without paperwork. Current status and the steps required for continuity belong in your purchase-stage due diligence.

Buyers should treat zoning verification and registration compliance as part of that due diligence. The day-to-day operational management of a rental property is a separate function that requires a dedicated property manager.

HARPTA and Closing Costs: What Second-Home Buyers Need to Know

The Hawaii Real Property Tax Act places a withholding obligation on the buyer, not the seller, when purchasing from a non-resident of Hawaii. Under HARPTA, the buyer must withhold 7.25% of the gross sale price and remit it to the Hawaii Department of Taxation at closing. This withholding is a prepayment against the seller's potential Hawaii tax liability, not an additional cost to the buyer, but it affects deal structure when the seller is a mainland owner counting on full net proceeds at closing. Hawaii resident sellers may certify their exemption using Form N-289. Non-resident sellers can apply for a reduced withholding certificate if their actual tax liability is lower than the 7.25% amount.

For buyers purchasing from out-of-state sellers, the common scenario in a second-home transaction, HARPTA coordination happens through escrow as standard practice. Understanding the rule before making an offer keeps negotiations and timelines on track.

Closing costs. Buyer-side closing costs in Hawaii typically run in the range of 1.5% to 3% of the purchase price, encompassing escrow fees, title insurance, recording fees, prorated property taxes, and lender fees where financing is involved. On a $2 million purchase, that range translates to approximately $30,000 to $60,000 in buyer-side costs. Sellers pay the conveyance tax, which scales with sale price, along with real estate commissions.

Hawaii closes transactions through a neutral escrow company, not through attorneys as in some mainland states. Title insurance is standard and particularly important given the complexity of Hawaii's land title history. Torrens system properties, Great Mahele land grant chains, and access easement questions are more common here than in most mainland markets, making a thorough title search a non-optional step.

Working with a Local Specialist in Kailua-Kona

Second-home buying in Kailua-Kona and across the Kohala Coast requires a specific set of skills: verifying STVR zoning at the TMK level, identifying whether a condo project is warrantable before an offer is made, navigating Hawaii County's TVR registration and NUC requirements, and working with local lenders who understand leasehold financing and non-warrantable resort condominiums. Hawaii County's systems and the Kona market's transaction norms are most efficiently navigated by someone with active, recent transaction experience on the west side of the Big Island.

As a Hawaii-licensed real estate broker and real estate agent in Kailua-Kona, a Certified Residential Specialist (CRS), and a Certified Luxury Home Marketing Specialist (CLHMS) at NextHome Paradise Realty, I work with second-home buyers across Kailua-Kona, Keauhou, and the Kohala Coast resort communities, including Mauna Lani Resort, Waikoloa Beach Resort, and Mauna Kea Resort. My focus is on matching buyers to the right property type for their actual intended use, whether that is a lock-and-leave condominium in Keauhou, a resort-zoned unit at Waikoloa Beach Resort with verified short-term rental authorization, or a luxury residence at Mauna Lani or Mauna Kea.

Reach me through +1(808) 938-3052 or send a message on my contact page.

Frequently Asked Questions

What makes Kailua-Kona a strong market for second-home buyers on the Big Island?

Kailua-Kona concentrates the west side's amenities, resort infrastructure, and direct mainland flight connections in one market, which is why it accounts for the largest share of second-home transaction volume on Hawaiʻi Island. The broader west side corridor, extending through Keauhou and north along the Kohala Coast to Mauna Lani Resort, Waikoloa Beach Resort, and Mauna Kea Resort, expands that range across multiple price points and property types, all within a consistently dry, leeward coastal climate that supports year-round lock-and-leave ownership.

Can I rent my Kailua-Kona or Kohala Coast property as a short-term vacation rental?

Three independent factors each require verification before you can rely on rental income from a second home here: the county zoning classification at your property's specific Tax Map Key, the CC&Rs of the condominium association if applicable, and current permit or registration status under Hawaii County's rules. Resort-zoned properties within Waikoloa Beach Resort, Mauna Lani Resort, and Mauna Kea Resort are generally structured for transient rental use, but the details vary by unit and building. Ordinance 25-50's registration framework, which opened September 1, 2026, adds a compliance layer that belongs in your purchase-stage due diligence rather than in a post-closing checklist.

What property tax rate applies to a second home in Hawaii County?

Plan on the non-owner-occupied residential rate under the fiscal year 2026-27 schedule (Resolution 574-26): $11.10 per $1,000 on the first $2 million of assessed value, $15.00 per $1,000 on the portion between $2 million and $4 million, and $17.00 per $1,000 on any portion above $4 million. The structure is progressive, so each rate applies only to its own band of assessed value rather than to the full purchase price. The homeowner rate of $5.75 per $1,000 requires the property to be your principal residence occupied more than 200 days per year, a threshold a second home does not satisfy.

What is the difference between fee simple and leasehold ownership in Kailua-Kona?

Fee simple means you own the land and the structure outright, which is the standard form for most residential and resort community transactions on the west side. Leasehold means the land is held by a separate entity; you own the structure and the right to use the land under a fixed-term ground lease, paying annual ground rent that escalates per the lease schedule. The lower purchase price of leasehold properties reflects financing constraints, escalating carrying costs, and a defined ceiling on long-term value. Confirm ownership type on every listing before investing time in further evaluation.

What does HARPTA mean for a buyer purchasing from an out-of-state seller?

When your seller is not a Hawaii resident, HARPTA requires you, as the buyer, to withhold 7.25% of the gross sale price at closing and remit it to the Hawaii Department of Taxation. That amount is credited against the seller's potential Hawaii tax liability rather than treated as an extra buyer cost, but it affects how the seller nets from the transaction and can factor into negotiations. Your escrow officer coordinates the mechanics. Knowing the rule before you make an offer prevents surprises at closing.