Timeshare Tax Increase Proposed in Maui April 18, 2011
Posted by John Stephens in : Hawaii timeshare, Marriott Timeshares, Sunterra/Diamond Resorts , add a commentTalk of a hike in property taxes for Hawaii timeshare owners has made its way to the local government level on the Hawaiian island of Maui, as the Maui County Council considers a proposed rate hike.
According to a report in the Maui News, a plan offered by Mayor Alan Arakawa would raise the property tax rate for timeshare owners from $14 per $1,000 of assessed value to $19.60, a whopping 40% increase. The plan is part of the County Council’s fiscal 2012 budget review process.
As expected, the proposal has met with stiff resistance from timeshare owners and the timeshare industry in Maui, which is one of the most sought-after timeshare locations in the world.
“My BlackBerry is almost dysfunctional with all the emails I’m getting from timeshare people,” said Council Member Gladys Baisa.
Mayor Arakawa has stated that taxpayers should not actually pay more money under his plan. Instead, the proposed rate increases are designed to be “revenue neutral” and balance out declines in property values, he said, so that the amount of tax revenue actually collected by the county would remain the same as last year.
“Some people will try to play semantic words and say, ‘You’re raising the taxes,’” he said. “We’re not raising the taxes.”
Unless timeshare property values have decreased 40% in Maui since last year to balance out the increase, I can’t buy into that argument. Sorry.
This argument usually hinges on accommodation taxes, which are paid by hotel guests, and the perceived lack of accommodation tax that timeshare pays into local government coffers. The thought is that higher property taxes for timeshare can balance out the supposed revenue discrepancy. But this argument comes unhinged because timeshare is not the same as hotel accommodation due to the nature of the real estate ownership model. It’s apples vs. oranges and local governments have tried for years to confuse the issue as a way to get more money out of the industry. They should be happy that occupancy rates for timeshare have run about 20% higher than hotels, which means more money being spent in the local community and funding the jobs that those resorts create.
Timeshare owners are an easy target because, while they technically own property, they are not considered constituents and elected officials know they can try and ride their backs for more revenue. But the real opposition officials run into comes from the industry itself, which is in a position to fund reelection campaigns and knows that higher taxes are not good for business.
“I’m before you today to voice our concern over the proposed property tax increases for timeshares,” said Gregg Lundberg of the Westin Ka’anapali Ocean Resort Villas.
He noted that Maui timeshare units pay the highest property tax rate in the state, and said higher tax bills could discourage potential visitors from buying Maui timeshare units, or lead to more units being foreclosed.
He called the proposed rate increase “unfair.”
“Timeshare properties are good employers, are good for the community and pay their fair share of taxes,” he said.
Couldn’t have said it better myself.
Maui is home to some wonderful timeshare properties such as Marriott Maui Ocean Club, Westin Ka’anapali Ocean Resort Villas and Diamond Resorts Ka’anapali Beach Club. Timeshare resale weeks at these, and more, resorts on Maui can be seen on the BuyaTimeshare.com website by clicking here.