Illegal Timeshare resort Tax Ruling could be overturned.

Maui County in Hawaii is waiting for a second court to rule after appealing a decision made by a Judge in march, who agreed the timeshare property tax classification established more than 10 years ago is illegal. If the county loses the suit, they could be faced with a bill for $34 million in property tax refunds.

A lawsuit was filed against Maui County back in 2013 by Ocean Resort Villas Vacation Owners Association which essentially disputes the classification of tax levied against timeshare resorts. Since 2008, the rate for timeshares has been $15,41 per $1,000 of net taxable assessed valuation. Hotels are taxed at $9.37 and homeowners pay the least amount at a rate of $2.85.

In his ruling, the Judge stated that, under Maui County Code, the council can create property tax classifications based only on differences in the use of real property and there is no distinction between the use of hotels and timeshares. He also noted that the only difference between a condominium classed as a hotel and a condominium classed as a timeshare is the existence of a timeshare plan.

Despite this ruling the County have appealed the decision and maintain that there is a significant distinction between timeshare resorts and hotels. They say because timeshare resorts do not come close to employing the amount of staff locally as hotels do, they do not contribute enough to the local economy. But they do make as much money as hotels do, in addition to this they charge owners annual fees which cover their costs of maintaining their properties.

Maui council maintains that timeshares were benefiting from tax loopholes that offered them incentives for converting hotels into timeshares. In addition to this they say that timeshares were not paying a fair amount of property taxes to pay for infrastructural impacts on roads, water supply, drainage and upkeep of the Island’s urban and recreational landscapes and that is why the property tax rate was set higher for timeshare resorts.

It is in no doubt that if this case is upheld in another hearing it will have a significant financial impact on Maui County, hopefully the county and resorts can come to an agreement and avoid any further litigation.

People who enter into Timeshare agreements often find it difficult to keep up with the mounting maintenance fees and simply cannot afford it any longer. They may also find that the Timeshare no longer suits their needs and simply want to end the contract. There are too many individuals who are willing to take advantage of Timeshare owners and offer fake products, along with Timeshare exit schemes. Before agreeing to any Timeshare termination or exit procedure with an individual or company, seek independent advise and fully research any company you are thinking of working with.

It is also important to remember that purchasing a Timeshare should NEVER be viewed as a financial investment. Timeshare is an investment in lifestyle, in future holidays and family time together. There is almost no resale value to a Timeshare.

The mis-selling of holiday products is, unfortunately, common practice within the holiday industry and these type of crimes often go unreported by the most vulnerable in our society and criminal convictions are few and far between.

If you have purchased a Lifestyle / Concierge Service, a Timeshare or a ‘Holiday Points’ based product from a resort or company and feel unhappy with the service, or feel you have been mis-sold this product, please get in touch with us to discuss how we may be able to help you with a possible Money Back Claim.