Back in December 2021, Paul wrote about DVC relaunching its Magical Beginnings point buyback campaign.

DVC Magical Beginnings is an offer you can take advantage of when buying DVC points directly from Disney. It allows you to receive a cash rebate in exchange for your first Use Year’s points. This applies to new or existing DVC members adding on, and it applies to any DVC resort Disney is actively selling, which can include certain “sold out” resorts. The cash rebate arrives in the form of a check about four weeks after closing on your DVC contract.

While giving up your first Use Year’s points may sound like a bad idea, for properties that are already open, like Riviera and Grand Floridian, if you choose a Use Year where 2023 has not started yet, you would receive 2022 Use Year points as well. This won’t work at the Villas at Disneyland Hotel because you do not receive 2022 UY points. You could, however, sell your 2023 UY points for a VDH contract.

For example, it is currently July 2023. If I purchased direct DVC points from Disney at Grand Floridian with an August Use Year, I would receive points for my August 2022 and 2023 years. The August 2022 Use Year points will expire on July 31, 2023 – although usually, if you just purchased the contract from Disney, they will let you bank those points. This leaves you with a choice, you could have double points to start with, or you could receive a cash rebate for those 2022 UY points.

While the program itself hasn’t changed, what has changed is the amount Disney is paying to buyback points. Disney is currently offering $22 per point, which is a pretty generous offer.

Here are the details available on the Disney Vacation Club website:

“Offer requires eligible new purchasers and add-on Members to be a resident of one of the 50 U.S. states and participate in a Resort sales tour, either telephonically or in person (“Tour”), and buy an ownership interest directly from Disney Vacation Development, Inc. (“Developer”) with at least 150 Vacation Points at select Disney Vacation Club Resorts. Eligible purchasers may exchange their full allotment of Vacation Points from the first Use Year for a cash rebate to be determined by Developer, currently $22 per point, subject to change. Amounts purchaser receives as part of this rebate may reduce the purchaser’s basis in the ownership interest for tax purposes. The TWDC Companies do not make any representations as to the income tax consequences of a rebate, sale, or resale of the purchaser’s ownership interest. Each purchaser should consult his or her own tax advisor as to these issues. Offer begins March 23, 2023. Purchasers must communicate their decision to participate in this offer to Developer at four (4) calendar days prior to the end of their first Use Year. Cash rebate cannot be applied toward any portion of the minimum 10% down payment required, depending on qualified financing, and is in the form of a check that will be mailed to purchaser approximately four (4) weeks after the deed has been recorded by the county. Offer cannot be combined with other select offers or discounts and may be extended, modified, or withdrawn at any time without notice. Void where prohibited.”

Making The Most of Summer 2023 Direct Sales Promotions

In addition to the current summer promotions, DVC introduced an additional “Welcome Home” offer which takes $1000 off the price for new members and $1500 off the price for existing members when you buy DVC points while in a Disney theme park or on a cruise. It also applies up to 5 days after your trip or if you have a future trip booked at a Disney hotel or on a Disney Cruise.

One of the most enticing offers for existing members is purchasing 150 points at Grand Floridian. Grand Floridian’s current price is $217 per point. For existing members, when you purchase 150 points, there is a $2500 developer credit, a $1085 discount for the “free points” promotion, and then the aforementioned $1500 “Welcome Home” discount. This brings the price for 150 points down to $183.10 per point. This is your upfront cost; however, if you also opt for Magical Beginnings, you would receive a cash rebate of $3300, reducing your cost to just $161.10 per point.

For new members, the offer is not quite as good at 150 points but still comes down to $171.10 per point after Magical Beginnings and $169.15 per point when purchasing 200 points.

Tax implications

I’m not an expert and cannot give tax advice, so please make sure you consult your tax accountant. However, DVC guides have verbally told multiple customers that the use of Magical Beginnings will not result in a 1099 being generated by Disney. Within the Magical Beginnings contract, it calls the amount a cash rebate. Rebates typically are not considered taxable income because you are essentially receiving a refund on the amount you paid upfront. If you also consider that when you purchase a home, if the previous owner needs to rent back from you, you can consider this as a reduction in the price of the home for your cost basis if you then sold the home later for a profit.

Again, I recommend you talk to your tax accountant about this before making any decisions on how to treat the Magical Beginnings rebate.

Should you use Magical Beginnings?

In my opinion, Magical Beginnings is a great way to help reduce the cost of purchasing a direct DVC contract. However, just be aware you are giving up a full year of points. For existing DVC members, it might be worth the savings if you already have points and vacations booked for the next year. At the end of the day, it is up to you to decide what to do. I know for myself it was worth getting that extra rebate!

One thought on “What is DVC Magical Beginnings?

  • Great article! Thank you so much for clearing all of this up.

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