Maui sits at the top of AirDNA’s national STR rankings — and unlike most “best STR market” lists, the Maui ranking reflects a structural advantage that survives Maui County’s tightening transient-vacation-rental regulation: the resort-zoned condo inventory in Wailea, Kā‘anapali, Kīhei (Maui Vista, Maui Kamaole), and Nāpili is permanently STR-eligible under decades-old county ordinances and is grandfathered against the Bill 9 / Phase Out reforms that limit STRs in apartment-zoned properties on the West Side. For investors holding resort-zoned inventory, Maui produces the highest absolute Year-1 federal savings of any Pacific market — driven by elevated FF&E replacement cycles caused by salt-air corrosion, full Hawaii conformity to federal bonus depreciation, and per-property prices in the $1.1M–$2.8M range.
- $348,000 Accelerated Depreciation
- $128,760 Est. Year-1 Federal Savings
- 162x Return on Study Cost
Want a number for a specific Maui property? Use the calculator — it’s pre-set with property-type defaults you can adjust to match your basis and tax bracket.
Cost Segregation in Maui, HI
Maui Investment Snapshot
- Typical Price Range $785K–$1.4M (Kīhei resort-condo); $1.2M–$2.4M (Wailea / Kā‘anapali resort-zoned); $2.5M–$8M+ (Kapalua, Mākena, Nāpili oceanfront SFR)
- Revenue Range $4,500–$11,000/peak winter week; $145K–$385K annual gross on resort-zoned properties
- Common Property Types Wailea resort-condo (Grand Champions, Wailea Ekahi/Elua/Ekolu/Ekahi), Kā‘anapali condo (Kā‘anapali Shores, Whaler, Royal Kahana), Kīhei resort-condo (Maui Vista, Maui Kamaole, Mana Kai), Nāpili oceanfront, Upcountry SFR
- State Income Tax 11.0% top marginal (highest is Hawaii’s 13-bracket structure capping at 11% above $200K single / $400K joint)
- Bonus Depreciation Conformity ✅ — Hawaii fully conforms to federal bonus depreciation
- §179 Conformity ✅ — Hawaii conforms to federal §179
- STR Regulation Resort-zoned inventory permanently STR-eligible; apartment-zoned properties subject to Bill 9 phase-out (West Maui Phase Out Ordinance, ongoing)
- Top Submarkets Wailea, Kā‘anapali, Kīhei, Nāpili, Kapalua, Lahaina (post-fire), Pā‘ia, Upcountry
- Typical Year-1 Federal Savings $78,000–$215,000
The Maui Market
Maui’s STR investor map breaks into two structurally different markets separated by the original 1960s-1980s county zoning decisions: resort zones (where STRs are permanently grandfathered) and apartment zones (where Bill 9 / the West Maui Phase Out is restricting and ultimately eliminating STR rights). Understanding which side of that line your acquisition target sits on is the single most important pre-purchase question on Maui.
Wailea and Mākena (South Maui resort zone) form the highest-end and highest-quality STR ecosystem on Maui. Wailea’s Grand Champions, Wailea Ekahi, Wailea Elua, Wailea Ekolu, Wailea Ekahi 1, Wailea Beach Villas, and adjacent properties run $1.4M–$3.8M for 2-3BR resort condos with full ocean views, walking-distance beach access (Wailea Beach, Polo Beach, Mokapu Beach, Keawakapu), and resort-grade amenities (multiple pools, fitness, beach club, valet). The Mākena Surf and Mākena resort villas extend the corridor south. These properties are permanently STR-zoned, command $5,500-$11,000/week peak winter rates (December-March), and represent the foundation of the institutional STR investor inventory.
Kā‘anapali and Honokōwai (West Maui resort zone) form the second major resort-STR corridor. Kā‘anapali Shores, the Whaler, Royal Kahana, Maui Eldorado, and the master-planned Kā‘anapali Beach Resort condos run $1.1M–$2.5M with similar resort-zone STR rights. Kā‘anapali was hit hard by the August 2023 Lahaina wildfire — physical damage was minimal in Kā‘anapali proper but the visitor-flow disruption and subsequent insurance/permit changes have shaped 2024-2026 acquisition opportunity. The post-fire rebuild discount is partly behind us, but Kā‘anapali is still trading at meaningful value relative to Wailea on a per-square-foot basis.
Kīhei (South Maui apartment zone, mostly) is the largest but most regulatorily-complex sub-market. Kīhei runs $675K–$1.4M for 1-2BR resort-style condos. Maui Vista, Maui Kamaole, Mana Kai, Kīhei Beach, Sugar Beach, and the dozens of mid-rise condo complexes along South Kīhei Road have varying zoning histories — some buildings are resort-zoned and permanently STR-eligible, others are apartment-zoned and either subject to existing minimum-stay restrictions or facing future Bill 9 phase-out. The county’s Maui Real Property Tax classification provides a partial proxy: properties classified as “Short-Term Rental” or “Hotel/Resort” pay a higher effective property tax rate (typically 1.45-2.0%) but enjoy permanent STR rights; properties classified as “Apartment” pay lower tax (0.55-0.65%) but have constrained STR rights. Always verify the specific building’s STR-eligibility status with Maui County Department of Planning before acquisition.
Nāpili and Kapalua (North-West Maui resort zone) form the upper-tier West Side market. Nāpili Point, Nāpili Kai, Hale Mahina, the Mahana, and the Kapalua resort complexes run $1.4M–$3.8M for 2-3BR oceanfront condos. The Kapalua Bay area (Bay Villas, Ironwoods Beach Club, Coconut Grove, Cliff Villas) extends into $2.8M–$8M+ resort-zoned single-family villas and large condos. This is the highest-quality STR rental product on Maui — but transaction volume is small and product is rare.
Lahaina post-August 2023 is in early reconstruction. Front Street and Lahaina Town historic core were destroyed; Kā‘anapali resorts north of Lahaina are intact. New construction permits are being issued through 2025-2027 with phased rebuild zones. For investors, Lahaina represents the largest open-ended cost-segregation opportunity on Maui — but only after the new construction is complete and properly permitted. We have begun seeing rebuild scope on Lahaina Town historic-cottage replacements come into our cost seg pipeline in late 2025-early 2026; expect this to grow.
Pā‘ia, Hāna Highway, and Upcountry (Kula, Makawao, Hali‘imaile, Pukalani) form the non-resort, non-coastal Maui inventory. Pā‘ia is windsurfing-and-surf-culture focused, with $850K–$1.6M cottage rentals on Hāna Highway and beach-adjacent sites — generally LTR rather than STR due to apartment zoning. Upcountry — Kula, Makawao, Pukalani — sits at 1,500-3,500 feet elevation with cooler temperatures, agricultural zoning, and a meaningful local-residential population. Investor activity here is primarily LTR for Maui workforce or part-time second-home with limited rental — cost segregation still works but the FF&E density is lower than resort-zone properties.
Why Cost Segregation Hits Different on Maui
The Maui cost-seg story has four structural drivers — three that increase the FF&E and 15-year buckets, and one (Hawaii’s high state income tax) that compounds the federal benefit unusually well.
Salt-air FF&E replacement cycles produce unusually high 5-year buckets. Maui’s coastal humidity, salt spray, and trade-wind-driven sand abrasion shorten the useful life of resort-rental FF&E meaningfully below mainland averages. We see investors replacing mattresses every 3-4 years (vs 6-7 mainland), kitchen appliances every 5-6 years (vs 8-10 mainland), patio/lanai furniture every 2-3 years (vs 5-7 mainland), exterior textiles, lamps, and decor on accelerated cycles. For cost segregation, this means the 5-year FF&E reclassification on a Wailea condo at acquisition is substantially fuller than the mainland equivalent — investors furnish to current replacement-cycle standards rather than retaining pre-acquisition FF&E that would soon need replacement anyway. A typical Wailea 2BR condo carries $58K-$78K of 5-year FF&E.
Resort-zone amenity-share components flow into the depreciable basis. Most Maui resort-zoned condos own a fractional share of the underlying resort’s pool deck, beach club, fitness center, parking garage, common-area landscape, and exterior signage. Engineering-based cost segregation identifies and reclassifies the unit’s pro-rata share of these components into 15-year MACRS — a category that conventional CPA depreciation software typically misses entirely. On a $1.45M Wailea Beach Villas unit, the pro-rata 15-year amenity-share component alone routinely clears $48K-$72K of depreciable basis.
Tropical landscape, lanai infrastructure, and outdoor living investment is extreme. The lanai (covered outdoor living space) is the defining feature of a Maui rental, and unit-level lanai investment is unusually substantial: ceramic-tile or composite lanai flooring, retractable shade systems or roll-down screens, dedicated outdoor furniture packages, lanai dining tables, ceiling fans (essential in pre-AC properties), outdoor kitchens with built-in BBQs, lava-rock landscape features, and tropical specimen plantings. Even on mid-rise condos, the unit-level lanai infrastructure adds $12K-$22K of 15-year MACRS basis.
Hawaii’s 11% top state bracket conforms to federal bonus depreciation, which compounds the federal benefit cleanly. Unlike California (where state non-conformity to bonus depreciation cuts the state-side benefit by 80-90%), Hawaii’s tax code conforms fully to federal bonus and §179. The 100% bonus depreciation amount on the federal return is allowed in the same Year-1 amount on the Hawaii return. For an investor in the 37% federal bracket plus 11% Hawaii bracket, the combined Year-1 marginal rate on a reclassification is 48% — among the highest combined federal-plus-state rates of any cost-seg market in the country. A $348K reclassification produces $128,760 federal + $38,280 Hawaii = $167,040 in combined Year-1 savings.
A Real Maui Example
A 2BR/2BA resort-zoned oceanfront condo in Wailea Ekahi, the original 1976 Wailea Resort condominium, located on the bluff above Keawakapu Beach with direct beach access via the resort path. Unit is on the third floor with a 220-degree ocean view, southwest-facing for sunset visibility, full kitchen, master suite with king and ocean-view king bed in the secondary bedroom. Acquired in late 2024 for $1.45M. Wailea Ekahi is permanently resort-zoned and a charter member of the Maui resort STR ecosystem. The unit operates STR through Wailea Realty’s distribution network and Booking.com / Airbnb / VRBO direct platforms, averaging $725/night peak winter and $385/night shoulder, generating roughly $185K gross annual revenue on 245 booked nights.
After pulling $215K of land value (Wailea Ekahi’s HOA-allocated common-area land share is roughly 14.8% of unit value — verified against current Wailea Ekahi master deed), and another $145K of structural shell allocation (foundation, framing, primary roof structure — these reclassify into 27.5-year residential rather than the 5/7/15-year accelerated buckets), the depreciable basis lands at $1.09M.
The cost segregation study identifies $68K in 5-year property — the complete FF&E set: king mattress sets in two bedrooms (Stearns & Foster), bedroom furniture (frames, nightstands, lamps, dressers, decor), living-room set (sofa, two accent chairs, coffee and end tables), dining set (6-seat table and chairs plus 4 lanai-table dining seats), 3 smart TVs (master, secondary, living), full kitchen appliance package (range, microwave, dishwasher, refrigerator, espresso machine, stand mixer), small appliances and full cookware/dishware/glassware service for 8, bathroom linens (3 sets per bath), washer/dryer in unit, lanai furniture (dining table for 4, two lounge chairs, coffee table, ceiling fan), beach gear inventory (chairs, umbrellas, snorkel sets, boogie boards), and the smart-home Nest/Ring/smart-lock package. $9K in 7-year property — built-in master bedroom closet system, kitchen banquette, lanai built-in storage. $138K in 15-year property — the unit’s pro-rata share of Wailea Ekahi’s three pool decks, beach club, fitness center, paved walkway system, parking garage, and common-area tropical landscape (verified against the resort’s master schedule of values), plus unit-level lanai improvements (ceramic-tile flooring, retractable shade system, lanai ceiling fan and lighting, lanai dining table built-in storage). Plus the 5-year reclassification of the central HVAC unit components, water-heater equipment, and bathroom ventilation packages (which on Maui, given salt-air corrosion, represent meaningful basis). Plus the unit’s recent (2022) full kitchen and bathroom renovation invoice, providing line-item cost detail for $52K of 5-year and 15-year reclassifiable improvements that flow into the Form 3115 lookback section.
Total reclassified: $348K, or roughly 31.9% of the depreciable basis. At 37% federal and 11% Hawaii, that is $128,760 federal + $38,280 state = $167,040 in Year-1 combined savings.
The STR-positioning matters for material participation. Wailea Ekahi rentals operate on either weekly or partial-week stays, with the average stay running 5.8 days — placing the property comfortably under the 7-day STR special test under §469. Material participation is established through the 100-hours-and-no-one-spending-more test. The owner-investor — a Bay Area technology executive with $580K W-2 income at her FAANG employer plus $185K of consulting 1099 income — clears the 100-hour test through guest communication, turnover-day quality control during her quarterly Maui visits, supply runs, marketing-listing maintenance, and direct property management coordination with Wailea Realty’s local operations team. With material participation established, the federal accelerated deductions offset W-2 income and consulting income directly without needing REPS qualification.
Who Is Doing This in Maui
The Maui STR investor profile is structurally different from most national STR markets — driven by the high purchase prices, the resort-zone scarcity, and Hawaii’s unusual combination of high state tax + full federal conformity.
The Bay Area tech-exec investor is the dominant archetype. L7+ engineering, product, or operations leaders at Google, Meta, Apple, Stripe, OpenAI, Anthropic, and the Series-B-and-up tech ecosystem with $400K-$1.5M household income, often in the 37% federal bracket, plus California state-residence with all the CA non-conformity issues that affects their CA properties (but NOT their Maui property — Maui is HI-source income with HI conformity to bonus). Many own a primary residence in San Francisco / Palo Alto / Atherton plus a Maui resort-zone condo as their second-home-with-rental-economics.
The Pacific-Northwest tech / healthcare investor — Microsoft, Amazon, Boeing, Fred Hutch, UW Medicine — runs the same playbook from Seattle / Bellevue / Mercer Island. Combined federal 37% + Washington 0% + Hawaii 11% (on Maui-source income) — the Maui-source rental income is the only state-tax exposure these investors face, but Hawaii’s federal conformity means cost segregation still produces the full Year-1 benefit on both layers.
The mainland physician / surgeon investor — particularly orthopedics, cardiology, dermatology, anesthesiology — represents a meaningful Maui investor cohort. High W-2 income at $500K-$1.5M, ability to deploy $400K-$800K of cash equity into a $1.4M-$2.4M Wailea or Kā‘anapali resort condo, personal connection to Maui as a multi-decade family vacation destination. Many run their Maui rental as a partial-year personal-use + STR mix, with cost segregation enabling the rental-period accelerated depreciation.
A fourth profile worth flagging: the Asian-Pacific buyer — particularly Japanese, Hong Kong, Singapore, and South Korean investors — represents 8-15% of Maui resort-zone transaction volume. These investors typically own through Hawaii LLCs, are non-US tax residents, and use cost segregation differently from US investors (the FIRPTA rules and US-source income mechanics drive different optimization). We work with their US-based CPAs to structure the cost segregation analysis to support both Hawaii state filing and US-source income reporting under the FIRPTA framework.
HI Tax Considerations
- Hawaii has 11% top marginal state income tax (above $200K single / $400K married filing jointly). Cost segregation savings flow through to the HI return.
- Hawaii fully conforms to federal bonus depreciation. The 100% bonus-depreciation amount on the federal return is allowed in the same Year-1 amount on the Hawaii return. This is structurally different from California and Massachusetts — Hawaii is one of the friendliest high-tax states for cost segregation.
- Hawaii fully conforms to §179. The federal §1.16M annual cap applies on the HI return as well.
- Maui Real Property Tax classification matters for Year-1 holding economics: STR-classified properties pay 1.45-2.0% effective rate; Hotel/Resort 0.85-1.45%; Apartment 0.55-0.65%; Residential 0.30-0.45%. Cost segregation does not affect property tax — but property tax classification can affect the post-acquisition cash flow that funds the cost-seg study fee.
- Hawaii recapture on sale follows federal rules (25% on §1250 unrecaptured gain) plus the 11% Hawaii ordinary income layer. Combined federal + state recapture rate: roughly 36% — substantial. 1031 exchanges fully recognized.
- The Hawaii General Excise Tax (GET) — 4.0-4.712% depending on county — applies to STR rental income but not to depreciation. Property’s depreciable cost basis is unaffected.
- The Transient Accommodations Tax (TAT) — 10.25% state + 3% Maui County = 13.25% combined — applies to STR rental payments. Again, separate from the cost segregation analysis.
Common Maui Investment Properties
- 2-3BR Wailea resort-zoned condo (Wailea Ekahi, Elua, Ekolu, Beach Villas, Grand Champions)
- 2-3BR Kā‘anapali oceanfront condo (Kā‘anapali Shores, Whaler, Royal Kahana, Maui Eldorado)
- 1-2BR Kīhei resort-condo with verified STR-zoning (Maui Vista, Maui Kamaole, Mana Kai)
- 2-3BR Nāpili oceanfront condo (Nāpili Kai, Nāpili Point, Hale Mahina, the Mahana)
- Kapalua resort-zoned villa (Bay Villas, Ironwoods Beach Club, Coconut Grove, Cliff Villas)
- Pā‘ia or Hāna Highway cottage (mostly LTR/MTR rather than STR due to zoning)
- Upcountry SFR (Kula, Makawao, Pukalani — primarily LTR)
- Post-Lahaina-fire new construction (rebuild scope, 2025-2027 inventory)
Depreciable Features We Commonly See on Maui
- Salt-air-resistant marine-grade exterior finishes (powder-coated aluminum, marine teak)
- Marine-grade HVAC and ventilation (corrosion-resistant condenser coils)
- Hurricane-rated impact windows and doors (post-1992 Hurricane Iniki upgrades)
- Wind-rated metal-clad roofing systems
- Ceramic-tile lanai flooring with retractable shade systems
- Lanai ceiling fans and outdoor lighting
- Lanai built-in storage and outdoor dining packages
- Outdoor kitchen with built-in BBQ (in detached/SFR properties)
- Tropical specimen landscape (palms, plumeria, hibiscus, monkeypod)
- Resort-shared pool decks and beach club facilities (pro-rata reclassification)
- Resort-shared parking garage and walkway systems (pro-rata reclassification)
- Smart-home Nest/Ring/smart-lock packages
- Marine-grade audio/video equipment for outdoor lanai entertainment
- Beach gear inventory (chairs, umbrellas, snorkel sets, boogie boards)
- Stearns & Foster, Tempur-Pedic, or comparable resort-grade mattress sets
- Premium kitchen appliance packages (Sub-Zero/Wolf in higher-end Wailea/Kapalua units)
- Lutron whole-unit lighting controls (in higher-end installations)
- Solar PV systems with battery backup (Tesla Powerwall) on SFR properties
- 240V Level 2 EV chargers (mandatory in some HOA new-construction approvals)
- Hawaiian-themed decor and art investment (often substantial)
What People Worry About (and What Actually Happens)
“Bill 9 / the West Maui Phase Out is going to kill my STR. What’s the cost seg implication?”
If your property is in a resort-zoned building (Wailea Ekahi/Elua/Ekolu, Kā‘anapali Shores, Whaler, Maui Vista, Mana Kai when STR-zoned, etc.), Bill 9 does NOT apply and your STR rights are permanent. Verify your specific building’s zoning with Maui County Department of Planning before assuming you’re affected. For apartment-zoned Maui condos that ARE subject to Bill 9 phase-out, the cost segregation analysis still works on the rental-use period — material participation can be established under either the STR special test (during STR-permitted years) or the standard rental rules (after phase-out conversion to LTR). The cost segregation Year-1 savings on the rental-period years are unchanged. What changes is the long-term hold strategy: many apartment-zoned Maui owners are converting to LTR or selling into 1031 exchanges before the phase-out compliance deadlines. Material participation pathway for STR owners →
“My CPA says cost seg doesn’t work on Hawaii condos because of the resort amenity-share allocation.”
The resort amenity-share allocation actually INCREASES the depreciable basis available for reclassification — your CPA may be conflating the land-share allocation (which reduces depreciable basis) with the amenity-share component allocation (which expands 15-year MACRS reclassification). On a typical Wailea Ekahi unit, the master deed allocates roughly 14.8% to common-area land (reducing depreciable basis) but the resort’s pool decks, beach club, fitness center, parking garage, and common landscape add depreciable improvement basis that flows into the unit’s pro-rata 15-year MACRS reclassification. Engineering-based cost segregation is designed to identify and document this — most CPA depreciation software treats the entire allocation as land and misses the 15-year amenity-share entirely. We pull the resort’s master schedule of values and unit-level allocation in every Maui condo report. How land valuation and allocation work →
“Can I do a Form 3115 lookback on a Maui property I’ve owned for 8 years?”
Yes. Form 3115 catches up missed depreciation on properties placed in service back to 1987, in a single Year-1 deduction without amending prior returns. For an 8-year-old Wailea Ekahi condo with no prior cost segregation work, the Form 3115 catch-up on a $300K-$350K reclassification typically clears $115K-$155K of immediate Year-1 deduction. We file Form 3115 with your cost segregation report and include the §481(a) adjustment calculation. Many Maui investors run Form 3115 lookback in years when they have other passive activity income to offset (a sale of one property, REPS qualification, or an §469(c)(7) election). Form 3115 lookback explained →
Why Cost Segregation Works for Maui Resort-Zone Vacation Rentals
Maui’s resort-zoned STR inventory carries the highest absolute Year-1 federal savings per property of any market in the United States outside of San Francisco multifamily. The drivers are stacked: high purchase prices ($1.4M-$2.4M typical), exceptional FF&E density (driven by salt-air replacement cycles and resort-grade furnishing standards), substantial 15-year amenity-share components from resort common areas, and Hawaii’s 11% state bracket with full federal bonus conformity.
A typical Wailea or Kā‘anapali resort condo carries a 5-year FF&E bucket of $58K-$78K — substantially above mainland equivalents because the salt-air replacement cycle drives investors to over-furnish at acquisition (knowing the FF&E will be replaced more frequently) and because resort-grade rental product requires Stearns & Foster or Tempur-Pedic mattresses, full Sub-Zero/Wolf or comparable kitchen packages, and complete furniture suites in every unit.
Beyond unit-level FF&E, the resort amenity-share component is the unique Maui driver. The master deed for Wailea Ekahi allocates roughly 12-15% of unit value to the resort’s three pool decks, beach club, fitness center, paved walkway system, parking garage, and common-area tropical landscape. These components are 15-year MACRS site improvements, and on a $1.45M Wailea unit, the pro-rata share clears $135K-$165K of depreciable basis. Most CPA depreciation software ignores resort amenity-share components entirely; engineering-based cost segregation captures it.
Unit-level lanai infrastructure adds another $12K-$22K of 15-year MACRS basis — the ceramic-tile flooring, retractable shade systems, lanai ceiling fans and lighting, outdoor furniture, and lanai dining infrastructure that defines the Maui rental experience.
With 100% bonus depreciation permanently restored under the One Big Beautiful Bill Act (signed July 2025), every reclassified dollar is deductible in the first year on both the federal AND Hawaii returns (Hawaii conforms fully). For owner-managed Maui investors who clear material participation under the STR special test, these deductions offset W-2 and consulting 1099 income directly.
Who This Example Applies To
- Resort-zoned Wailea, Kā‘anapali, Nāpili, Kapalua, or verified-STR-zoned Kīhei condo owners
- Bay Area, Pacific NW, or mainland-physician investor profiles in 35-37% federal brackets
- Multi-property Maui investors operating across Wailea, Kā‘anapali, and Kīhei portfolios
- Post-Lahaina-fire rebuild owners (2025-2027 new construction inventory)
- Investors using §469(c)(7) REPS election or STR special test for material participation
- Properties with fully resort-grade FF&E, lanai infrastructure, and resort amenity-share rights
- Asian-Pacific non-US-resident investors holding through Hawaii LLCs (with US CPA support)
If your Maui property is an apartment-zoned non-STR condo or an Upcountry / Pā‘ia LTR, the FF&E reclassification will be smaller (lower-quality furnishing standard) and the absolute Year-1 savings will be at the lower end of the Maui range. The resort-zone advantage is real and substantial — properties without it produce solid but less spectacular cost-seg outcomes. Actual results vary based on building zoning, FF&E scope, resort amenity-share allocation, and post-fire rebuild documentation.
Compare: Maui Properties at Different Price Points
| Price | Accelerated | Year-1 Combined Fed+HI Savings | Study Cost | ROI |
| $785K Kīhei 1BR resort | $190,000 | $91,200 | $895 | 102x |
| $1.15M Kā‘anapali 2BR | $278,000 | $133,440 | $1,295 | 103x |
| $1.45M Wailea Ekahi 2BR | $348,000 | $167,040 | $1,295 | 129x |
| $1.85M Wailea Beach Villas | $445,000 | $213,600 | $1,595 | 134x |
| $2.5M Kapalua Bay Villas | $610,000 | $292,800 | $1,595 | 184x |
| $3.8M Kapalua oceanfront SFR | $928,000 | $445,440 | $1,895 | 235x |
Compare: $1,450,000 Across Property Types
| Property Type | Accelerated | Year-1 Combined Fed+HI Savings | Study Cost | ROI |
| Wailea resort-zone STR condo | $348,000 | $167,040 | $1,295 | 129x |
| Apartment-zone LTR (post-Bill 9) | $268,000 | $128,640 | $1,295 | 99x |
| Upcountry SFR LTR | $245,000 | $117,600 | $1,295 | 91x |
| Maui small-MF (duplex) | $278,000 | $133,440 | $1,395 | 96x |
Frequently Asked Questions
Why does Maui produce higher absolute savings than other Pacific or Hawaii markets?
Three drivers stack: (1) high purchase prices ($1.4M-$2.4M typical for Wailea/Kā‘anapali resort condos), (2) elevated FF&E density driven by salt-air replacement cycles plus resort-grade furnishing standards (5-year bucket runs $58K-$78K vs $35K-$50K mainland equivalents), and (3) Hawaii’s 11% state tax bracket combined with full conformity to federal bonus depreciation — meaning the federal Year-1 savings + state Year-1 savings stack rather than offset. A $1.45M Wailea condo produces $167K Year-1 combined federal + Hawaii savings; a $1.45M California property at the same federal accelerated amount produces $112K federal but only $5K-$12K California (due to CA non-conformity to bonus). Maui is one of the friendliest high-tax cost-seg markets in the country.
How does Maui Bill 9 / the West Maui Phase Out affect my cost seg analysis?
Bill 9 only affects apartment-zoned properties subject to the West Maui Phase Out compliance schedule. Resort-zoned properties (Wailea Ekahi/Elua/Ekolu, Kā‘anapali Shores, Whaler, etc.) are permanently STR-eligible and unaffected. For affected apartment-zoned properties, the cost segregation analysis still works on the rental-use period — Year-1 federal + Hawaii savings are unchanged on the year of acquisition. What changes is the long-term hold strategy: many apartment-zoned owners convert to LTR before the phase-out deadline, and the post-conversion years still produce ongoing depreciation deductions on the originally-reclassified components, just under standard rental rules rather than STR special test. Always verify your specific building’s zoning before purchase or before assuming Bill 9 applies.
Does the resort amenity-share component really reclassify into 15-year MACRS?
Yes, and it’s the single largest 15-year MACRS reclassification we identify on Maui condos. The resort’s pool decks, beach club, fitness center, paved walkway system, parking garage, and common-area landscape are exterior land improvements — not structural building components. Under the IRS Audit Techniques Guide for Cost Segregation, these reclassify into 15-year MACRS (Asset Class 00.3). The unit’s pro-rata share — established by the master deed’s allocation schedule — reclassifies the same proportion. We pull the master schedule of values and unit-level allocation from the resort’s recorded CC&Rs in every Maui condo report, providing the documentation that supports the 15-year reclassification. CPAs unfamiliar with resort-condo cost segregation often miss this; engineering-based studies are designed to capture it.
Learn More About Cost Segregation
- What Is Cost Segregation? — Full explanation of how the study works and what you receive
- How Much Does a Cost Segregation Study Cost? — Pricing breakdown by property type and value
- State Tax Rules and Cost Segregation — How Hawaii conformity (vs CA non-conformity) affects timing
- Form 3115 Lookback Study — Catch up missed depreciation on a property you already own
Ready to See Your Actual Maui Numbers?
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