As reported by the Orlando Business Journal this morning, a Florida bill sponsored by Representative Randy Fine (Republican — Palm Bay) would redefine the way timeshare properties are valued in the state, consequently allowing the potential for massive tax breaks to entities in the state such as Walt Disney World, Hilton Grand Vacations, Marriott Vacations Worldwide, Westgate Resorts, and Travel + Leisure Co.’s Wyndham Destinations.
Florida House Bill 451 primarily aims to reduce the amount of property taxes paid by timeshare owners to city and county governments, by allowing owners the right to determine “fair market” rates via resales, even if there are only a small handful.
Sometimes, there aren’t enough observable resales to adequately and accurately determine a fair market value. Under current practice, when this happens, the property tax is determined by “usual and reasonable fees and costs of the sale” from the original purchase price, instead of the limited selection of resales. This can end up reflecting 50% of that original price, which proponents of the bill argue is too high.
On the affirmative side, sponsor Fine insists allowing the rates to be determined by even the smallest amount of comparable resales is necessary for fairness:
Your [property] taxes should be based on what it’s worth. Timeshares are like a car. We need to do a better job of valuing them. Oftentimes the resale value of timeshares is not substantial and I think that’s the issue. [This is a] matter of fundamental fairness and paying the value of what they are worth.
On the opposing side, critics are worried the bill would simply offer extra and humongous tax breaks to major corporations, with no major benefit for anybody else. The utilization of resales as a measurement is also considered unreliable. Loren Levy, general counsel for the Property Appraisers’ Association of Florida, had this to say:
When you’ve got 600 good arms-length transactions versus four that come out of a junky market where most of it is transacted for nominal doc stamps — it’s just not a reliable place to gather data. It shows you what a big deal this could be.
By his estimation, individual timeshare owners could save $40 per year in taxes, but “obviously the true benefactor would be the large resort developers that have all these units in the inventory.”
Representative Anna Eskamani (Democrat — Orlando), who opposed the bill in Committee, did not view it as “the most accurate approach” and echoed concerned sentiments that it would ultimately benefit large companies over individuals.
A state analysis of the bill (conducted by the House Ways & Means Committee) estimates this will reduce county and local property tax revenue by $208.2 million, including $77.5 million for public schools, beginning with fiscal year 2023-2024. If the bill is passed, it is slated to take effect July 1 this year.
After gaining a majority of approval from the aforementioned Ways & Means Committee, it is now on its way to the Commerce Committee.
Disney’s Timeshare Operations in Florida
The Walt Disney Company is a major timeshare operator in Central Florida through the Disney Vacation Club (DVC), which is a vacation timeshare program headquartered in Celebration. Of the 16 DVC-specific properties currently in operation, 11 (containing 3,600 units) are at Walt Disney World, with an additional Florida destination in Vero Beach.
According to Disney’s report for the 2022 fiscal year, the Parks, Experiences, and Products division recorded almost $29 billion in revenue, of which $6.4 billion was categorized for resorts and vacations.
Given recent heated legal fights between The Walt Disney Company and Governor Ron DeSantis driven by his continued onslaught of supposed retribution, it’s certainly interesting to see a bill from his own political allies that, while not specifically directed at Disney, aims to deliver the company massive savings.
What are your thoughts on this new timeshare appraisal proposal? If you’re a Disney Vacation Club member, how do you feel this may affect you? Let us know in the comments.