Posted on September 28, 2009
Thanks to both ARDA (the American Resort Development Association) and the state legislation in Florida, laws have been recently passed to protect owners of timeshare units from additional taxes!
One of the major benefits of timeshare ownership is the ability to utilize an exchange company like Interval International or RCI to exchange a year’s vacation week at one resort for a vacation week at another resort of similar “value”. The exchange companies charge not only a membership fee but also an additional fee when the owner ‘deposits’ or ‘exchanges’ their usage week.
As state and local governments are searching for new revenue to supplement budget deficits, a tax on resort exchanging has been a growing concern. The HB61 Bill, recently passed in Florida, now protects timeshare owners from having to pay a tax on timeshare exchanges. This makes Florida one of three states legally preventing exchange taxes. The concern is that these potential taxes will not only raise the cost of the already pricey exchanges, but also lower the desirability of the exchanges that are typically used as a major selling point for timeshare owners.
The passing of HB 61 has also allowed for timeshare developers to offer “Debt Cancellation” to their potential purchases. Just as many auto manufacturers are now offering the option to return the purchased product in the event of a loss in income, timeshare developers are able to offer the same deal. New buyers can rest assured that if they buy a new timeshare and lose their job, they can ‘return’ the timeshare to the resort without a negative impact on their credit score. This is a potentially major change in the timeshare industry, as one of the greatest causes of dissatisfaction for timeshare owners is that the developers typically have offered no assistance to owners looking to return or resell their timeshare unit in the event of a lifestyle change.
Here at Timeshare Broker Associates, we applaud the developers for trying to find a more reasonable solution for their clients—however we want to remind owners that by selling your timeshare on the resale market, you can turn your unwanted usage into cash during your time of need, versus forfeiting the entire purchase.