UPDATE 5/2/2021: With the Florida legislative session concluding on April 30th, 2021, so has the prospect of Senate Bill 1358 and House Bill 1007. Both bills died in committee without being taken up by the full House or Senate, likely due to large concerns surrounding the effects this timeshare legislation could have on county budgets.
A bill currently winding its way through the Florida legislature could impact Disney Vacation Club property taxes in the future.
According to the Orlando Sentinel, Senate Bill 1358 and House Bill 1007 look to change the method by which timeshares are appraised. Under current law, appraisers look at new sales that occur for each property to value the resorts. This legislation aims to require appraisers to factor in resales for a property if a reasonable number of sales examples exist.
Florida Senator Joe Gruters spoke to the bill in a recent regulated industries committee meeting. Sen. Gruters stated that most new timeshare purchases have a sales premium in excess of 50% of the total purchase price. This price is viewed as significantly inflated when compared to resales that occur within the same unit. “All we’re doing with this bill is saying that the taxpayer has the ability to appeal that assessment based on current resales.”
County appraisers are opposed to this bill and are concerned with its impact on the revenue generated by these property taxes. The Orlando Sentinal states that timeshares account for approximately $175 million in annual property taxes in Orange County that help fund schools, libraries, and parks throughout the area. If passed, Orange County Property Appraiser Amy Mercado believes that these receipts could decline by anywhere between 50% and 70%.
Disney Vacation Club could stand to benefit from this change but has stayed quiet and distanced itself from the bill itself. While Disney was asked to review the legislation at its sponsoring members’ request, they are not actively lobbying for its passage and are quietly watching from the sidelines.
With resales already making up a significant percentage of Disney Vacation Club sales, it is unlikely that this bill’s passage will have any large effects on owners’ property taxes. However, any savings associated with a reduced tax burden would find their way to DVC owners in future annual dues estimates.
We will be watching these bills as they slowly work their way through this legislative session and report back any new updates!
Source: Orlando Sentinel
2 thoughts on “UPDATE: Florida Timeshare Legislation Could Impact Disney Vacation Club Property Taxes”
I could see the potential to hurt DVC members in the long run. Including resales wouldn’t likely reduce the appraised value of DVC locations significantly, as they may already be factored in due to the larger sample size of resales and the fact that they are not being sold as “distressed” properties at a 99% discount. Appraisers already apparently have the option to consider resales, so may already be doing so for Disney. Even if the assessed values get reduced, it likely will not be much and not enough to make a significant difference for most of us. Disney will see some benefit given that they own well over a million points.
The problem comes when you look at how this will affect other resorts where resales are for a fraction of the direct sale price. As pointed out, this could cost the county close to $100 million. The logical counter to this would be to find a way to then increase the tax rates for properties that are timeshares to make up the difference. While this wouldn’t hurt those other timeshares in the long run, since worst case they just get back to what they’re paying now, but this would negatively affect DVC because they would not realize that large reduction in assessed value. Instead, if the assessed value holds steady or only goes down a small amount, an increase in the tax rate (especially an increase significant enough to offset the reduction in revenue from this change) could cost DVC much more in taxes in the long run.
I don’t know if the laws work differently in FL, but here in good old NJ, the budget is the budget regardless of the tax base. If the total of all appraisals goes down, the tax rate goes up to offset it. The effect is that all properties that didn’t get the appraisal reduction (in this case, likely to be DVC and other businesses and homeowners) would ALLsee their taxes go up to compensate for the loss elsewhere, making the total collection the same as before. This happens occasionally on personal property here, as well, when they do an overall reappraisal. People have seen taxes jump 20-30% in a year because of it.
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