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Hawaii Timeshare Owners Should Expect Yet Another Tax Increase

Maui County Council Budget and Finance Committee Chairman Riki Hokama has submitted his proposal for the fiscal 2018 budget. The proposal will be reviewed by council members, who have until June 10th to finalize. The new budget will take effect beginning July 1. As expected, the proposal includes yet another property tax increase for consumers who own timeshare interests.

Under Hokama's proposal, timeshare owners would again see the highest rate of tax increase. The chart below shows the category of property, the proposed rate, the current rate, and the tax increase.

• Homeowner: $2.86 proposal, $2.70 current rate- approx 6% increase

• Apartment: $6.32 proposal, $6.00 current rate- approx 5% increase

• Hotel and Resort: $9.37 proposal, $8.71 current rate- approx 7.5% increase

• Time Share. $15.43 proposal, $14.31 current rate- approx 7.8% increase

Looking at the numbers, you'll notice that the timeshare owners pay a tax rate in excess of 500% higher than a homeowner. And, times…

Article States the Typical Timeshare Resale Price is Five Dollars

An article in the Orange County Register provided details of a recent property auction in Orange County, California - where the county was attempting to collect unpaid property taxes. The tax auction included two hundred and eighty six timeshare intervals, all with unpaid property taxes for at least five years. During the auction, only 18 of the timeshares were sold- leaving the remaining 268 timeshare intervals in a state of abandonment. Some of these timeshares have been included in multiple county tax auctions without success.

The article goes on to claim that for some of the timeshares that did sell, the buyers likely paid far more to clear the tax deficiency than the expected resale value.

"....Data on the timeshare market website showed that some bidders may have paid more in the auction than they could have on the open market.  For example, the county website showed one buyer paid $1,100 for a timeshare in the Capistrano Surfside Inn, located across from Doheny…