Ca. Prop 88 could impact on timeshare cost

Every property owner in California, no matter how big or small or valuable their parcel, faces paying a flat $50 tax to fund schools under a measure voters will be asked to approve in November. (Proposition 88)

Although it's still early in the election season, the move already is generating criticism from taxpayer groups and property owners who say it's a regressive tax and adds to the burden on average citizens who are already overtaxed.

Proponents of Proposition 88 - authored by EdVoice, a coalition that includes backing from such wealthy philanthropists as Netflix CEO Reed Hastings, Silicon Valley investor John Doerr and SunAmerica Chairman Eli Broad - say the state's schools are in dire need.
But critics note the measure places the same tax on a small one-bedroom home in Reseda as it does on a mansion in Bel Air or massive farm in the Central Valley.


"I'm not sure they have completely thought through how that's going to be perceived." for instance, what impact could it have on the timeshare industry?


The timeshare provision varies according to a county's tax policies, according to officials in the timeshare industry. If the county sends separate tax bills to each individual owner of a timeshare, those individuals are likely to each have to pay $50.

But if the county sends a single bill to the timeshare association or management company, which typically then sends its own bills to the individual owner, it is likely they would only have to split a single $50 payment among all the owners.

That means in some counties, if a timeshare is divided among 52 weekly owners, the total tax bill on that unit would amount to $2,600. In other counties, it would total $50.

"It's very concerning because timeshare is a vital part of the California tourism economy and one that has been continuing to grow in recent years," said Jason Gamel, vice president of the Washington-based American Resort Development Association, which represents the timeshare industry. "It could be detrimental to the timeshare industry and to residents of California."

California has about 12,000 timeshare units, generating at least $3 billion in economic impact, including $418 million in tax revenue, according to an ARDA study.

If/When this passes, each board will need to inform owners of this change. Then they'll need to submit a vote to the owners asking them if they'd like the association to pay the taxes and absoarb it through increased maintenance fees.
If all owners save $50/year, this may be the catalyst to get CA timeshares on board with the concept of the resort paying taxes.
What will this do to all the foreclosure tax sales??

Oh.... this might not get everyone on board with this idea... Prop 13 might mess things up. Of course, those who are "protected" under prop 13 are likely paying taxes on the inflated initial purchase price.

skimble said:

If/When this passes, each board will need to inform owners of this change. Then they'll need to submit a vote to the owners asking them if they'd like the association to pay the taxes and absoarb it through increased maintenance fees.
If all owners save $50/year, this may be the catalyst to get CA timeshares on board with the concept of the resort paying taxes.
What will this do to all the foreclosure tax sales??

Oh.... this might not get everyone on board with this idea... Prop 13 might mess things up. Of course, those who are "protected" under prop 13 are likely paying taxes on the inflated initial purchase price.

Click to expand...

Skimble,

As you know most CA timeshares get seperate tax bills. The board does not need to inform owners of changes to their taxes. The assesors office will do that . Also, the HOA is not going to pay this tax and cover it with extra maint fee's. I'm sure it would just be added to the annual property tax bill that the county sends out. The resort will have no business getting involved.

Yes, this will benefit those resorts that pay the taxes as one lump sum. howevber those resorts are typically paying a higher tax due to the value being based on developer sales price.

CaliDave said:

Skimble,

As you know most CA timeshares get seperate tax bills. The board does not need to inform owners of changes to their taxes. The assesors office will do that . Also, the HOA is not going to pay this tax and cover it with extra maint fee's. I'm sure it would just be added to the annual property tax bill that the county sends out. The resort will have no business getting involved.

Yes, this will benefit those resorts that pay the taxes as one lump sum. howevber those resorts are typically paying a higher tax due to the value being based on developer sales price.

Click to expand...

I misunderstood another post I read. In that post, the association fought the assessor using actual sales records to bring the assessment down.
oops.

There are enough timeshare owners in CA to defeat this. (if they understand the ramifications.)

I just got a reminder letter from RCI about this...

Here's the entire letter which explains it pretty well:

"Dear <timeshare owner>

As a timeshare owner, we want to warn you about a proposed property tax which unfairly targets timeshare owners in California.

On the November ballot this year is Proposition 88, which if adopted by voters, would impose a $50.00 tax on every time share interval. According to our analysis, the owner of three one week intervals, for instance, would be subject to $150.00 per year in new taxes.

Not only is this a burdensome new tax on your timeshare, it is also grossly unfair because it would be exactly the same amount for a single one-week time share unit as for an entire oil refinery, huge shopping center or a $5 million mansion for the entire year. Additionally, it is a tax of indefinite duration - put another way, this tax would last forever.

Timeshare owners are the very hardest hit of all property owners under Proposition 88! If you owned a regular condominium unit, you would pay $50 a year. If you own one week of use in that unit, you pay the same $50! Each time share unit will have the tax multiplied by 52 weeks, or $2,600.00 a year. And remember, this is not just a one-time tax – this tax must be paid every year that you own your time share interest.

Unlike other property taxes, this new parcel property tax takes only a 50% vote to pass (most property taxes take a two-thirds majority vote to pass under Proposition 13).

So what can you do? First and foremost be sure you are registered to vote (if you are not, go to http://www.ss.ca.gov/elections/elections_vr.htm for an application).

Then be sure you vote NO on Proposition 88. You can vote by mail by requesting a ballot at your local County Registrar’s office.

Then tell your friends and neighbors about Proposition 88. Refer them to www.NoProp88.com for more information. Visit www.NoProp88.com yourself to learn how to persuade others to Vote No on Proposition 88.

Finally, forward this email to any other voters in California that you know own timeshare interests. And, please, do it now as time is short!

Sincerely,
Mary Mahoney
President
RCI North America"

It did not pass.

I think there were more Californians concerned about this than just California timeshare owners.