Maui, HI Cost Segregation: Median $62,694 Year-1 Savings (2026)

Why Maui is different

Honest framing first: Maui is the highest-regulatory-risk market in the Cost Seg Smart network as of 2026. Following the August 2023 Lahaina fires that destroyed much of West Maui, Maui County has announced an active short-term-rental phase-out plan targeting thousands of West Maui condo units (Kaanapali, Lahaina, parts of Honokowai), properties operating as STR for years would be required to convert to long-term-rental use, with phase-out timelines published by the county. For STR-intent investors, this means the §469 short-term-rental loophole that has historically supported Maui STR cost-seg strategies is at material risk for West Maui properties in particular. Buyers should consult Maui County's current ordinance and phase-out status before underwriting STR-revenue assumptions.

Hawaii's state tax position adds friction. HI top marginal rate (11%) is among the highest in the United States, and HI partially decouples from federal §168(k). For 2025+ acquisitions under OBBBA's 100% federal bonus, the HI-side timing mismatch on the bonus depreciation acceleration is meaningful, the federal Year-1 cash captures cleanly, but state-side acceleration defers over the regular MACRS schedule.

Where cost-seg still works in Maui: upcountry properties (Kula, Makawao) and east-Maui rural product (Hana) face lower phase-out risk because their STR demand is less concentrated and the phase-out plans target high-density West Maui resort corridors. North Shore (Paia, Haiku) sub-markets have moderate exposure. For long-term-rental investors not pursuing STR-loophole treatment, the regulatory phase-out is less of a concern, standard §469 passive-loss rules apply, and the cost-seg study captures the federal acceleration cleanly. The bottom-line assessment: Maui cost-seg works for LTR investors and for STR investors in lower-phase-out-risk sub-markets, but requires meaningful regulatory due diligence that doesn't exist in markets like Park City, Tahoe, or Destin.

Hawaii state tax position: Hawaii partially decouples from federal §168(k), HI requires addbacks for federal bonus depreciation with recovery on the regular MACRS schedule for state purposes. Combined with Hawaii's top 11% state rate, the state-side timing mismatch on cost-seg acceleration is meaningful. The federal §168(k) acceleration is unaffected; the HI-side reconciliation defers state benefit over the regular MACRS schedule.

Decoupling: Hawaii has periodically modified bonus depreciation conformity. Verify current-year treatment with your CPA.

Verify with your CPA. State tax conformity rules for federal §168(k) bonus depreciation are adjusted frequently, multiple states have modified their treatment two or more times in the past decade. The general framing on this page reflects our understanding as of May 2026, but you should always verify current-year treatment with a qualified CPA or tax attorney before relying on specific dollar projections for your situation.

Engine outputs: 5 Maui fixtures

These aren't rough estimates. Each fixture was run through the same engine that produces your actual study, RSMeans 2026 base costs, BLS PPI time index, county assessor land allocation, IRS Pub. 946 / Rev. Proc. 87-56 MACRS classification, 100% bonus depreciation per OBBBA.