Hawaii - HB809 - Hawaii sticking it to timeshare owners

There is legislation in the state government which is an initiative by the governor to increase the TAT tax for timeshare owners.

http://www.capitol.hawaii.gov/session2011/lists/measure_indiv.aspx?billtype=HB&billnumber=809

For those who don't know what that is, it's the tax state's charge for hotel stays. Hawaii is the only state that also applies it to timeshare owners.

The bill proposes that timeshare owners pay an additional 2% over what hotel customers pay for the period July 2011 thru July 2015.

I have written numerous letters and testimony to both the governor and state senators and representatives with my objections to this unfair taxing.

The response I received back from the governor was basically "thank you for sharing your concerns, I am aware you already pay property tax anyway but I am not listening to your concerns".

The bill passed in the house and is before the senate with the likelyhood of passing. Why wouldn't it, we out of state owners can't vote in these people and would take a bath reselling our units which they still would get the taxes from the new owner anyway :mad:

This is good news for unprincipled/apathetic owners and those who can trade from other timeshares outside HI, because you now have an extra unit for one week available at the Westin Maui for the next 4 years as I will not be travelling to Hawaii and will trade my week during this period.

There is additional legistlation in motion to increase other taxes on timeshare owners as well.:mad:

So why not sell now before the bill goes into effect? :confused:

I hate to be mean about it, but you did buy property in another state. You assumed the risk. That said, I can understand that you would be upset. Nobody wants to pay more.

So why not sell now before the bill goes into effect? :confused:

I hate to be mean about it, but you did buy property in another state. You assumed the risk. That said, I can understand that you would be upset. Nobody wants to pay more.

Because resale on timeshares you get 20 cents on the dollar back. If I had foresight six years ago that this would happen I wouldn't have bought in the first place.

Times are tough for real estate.. and the state is looking for more ways to generate more money. But yes, I agree, why should owners of fee simple real estate have to pay another tax?

Add this to the already long list of reasons not to buy a timeshare.

Because resale on timeshares you get 20 cents on the dollar back. If I had foresight six years ago that this would happen I wouldn't have bought in the first place.

??? What were the returns six years ago, 30 cents on the dollar?

It still maybe worth it, with the fee added on. But the global picture will have the price of the time share take a hit.

Hawaii is in rough shape economically and they're looking to tax anyone and everyone into oblivion to maintain the status quo for our state government. Timeshare owners are an easy target because they can’t voice their complaints with votes. The Governor has made it clear that he will do whatever he wants regardless of who it affects. Hawaii is an overwhelmingly democratic state; the house, senate, and governor are all democratically controlled so there are no checks in place. I expect a lot more new taxes in place before the 2012 elections roll around. Welcome to the so called “price of paradise.”

Because resale on timeshares you get 20 cents on the dollar back.

bingo.

If you really want to screw 'em, move here.

-David

How is this fee any different than the ridiculous occupancy taxes, airport taxes, etc foisted upon tourists?

What I'd like to know is what rate are they basing this tax on? It's not like you're paying anything. Your annual fee covers maintenance and taxes, so are they imputing a rate to tax you on?

In addition to the TAT that we TS owners have to pay (it's based on our MFs -- yes, we pay TAT on things like our reserve fund for replacing our lounge chairs), Maui also classifies TS owners as property owners, so that they can tax us even further. Maui is the only place in the U.S. that has created a special category just for timeshare owners. We feel so special.

TS owners currently pay 14% per $1000 of "highest and best use" valuation -- a rate that is 65% higher than what they tax hotels, and 700% more than they tax an owner of a private home. Residents also enjoy a $300,000 exemption before they ever pay a penny in property taxes.

So, take a piece of property valued at $2,000,000. Here is what each would owe per year in property taxes:

Maui resident homeowner: $4,250
Maui hotel guest: $17,000
Maui timeshare owner: $28,000

And now the mayor of Maui has proposed increasing the rate to $19.60 per $1000. Or 1,000% more than residents. :eek:

BTW, how is the TAT and property tax rates different than a tourism tax? Because if I want to vote with my feet and avoid Phoenix because of its usurious taxes on tourists, I simply avoid Phoenix. But unlike a regular tourist, I am contractually obligated to pay my MFs whether or not I ever set foot on the island. If I want to sell, I have to find a buyer. And there are now THOUSANDS of resales up for sale.

Yes, take it from me and don't buy a timeshare, especially on Maui.

??? What were the returns six years ago, 30 cents on the dollar?

????? back

The unit I bought for 45,000 in 2005 sells for 9,000 on the resale market today.

Unfortunately, the unit you bought in 2005 for 45k sold for 9k in 2005 or 2006 on the resale market.

Timeshares are usually a really bad deal unless you buy a resale for pennies on the dollar. No matter how hard I have tried, I have never been able to justify paying that kind of money for one - and I really tried with Disney and Hilton. It's nothing more than a prepaid vacation.

Sorry :(

I would bail on it while I could.

I general, if a high percentage of the purchase price for something is going toward a sales commission, you are probably getting a bad deal. This is very true of time shares (hence some of the hardest sells out there), and the first of many red flags for potential purchasers.

In my case, I purchased resale so the purchase price was discounted significantly from going developer rates. It's the subsequent jacking up of MFs, from both Starwood and from Maui county, that is angering me.

In my case, I purchased resale so the purchase price was discounted significantly from going developer rates. It's the subsequent jacking up of MFs, from both Starwood and from Maui county, that is angering me.

I agree. I did not buy my timeshare my in-laws got tired of paying MF and gave it to hubby and I. When we were given the TS 5 years ago MF were $690 a yr. Now they are jack up to $1250. That is one heck of a increase in 5 years and now they are talking about raising it again. UGG...

In purchasing anything that gives the seller the right to assess fee in the future- you should assume that those fees will increase at the absolute MAXIMUM rate permitted in the contract. Starwood has no incentive whatsoever to hold maintainance fees down and most likely extracts significant profit from the grossly inflated fees.
At $1250 "maintainance" for what a 1/52 share of a single unit? Does anyone believe for a second that "maintainace" a single unit runs in excess of 55k a year?????

In purchasing anything that gives the seller the right to assess fee in the future- you should assume that those fees will increase at the absolute MAXIMUM rate permitted in the contract. Starwood has no incentive whatsoever to hold maintainance fees down and most likely extracts significant profit from the grossly inflated fees.
At $1250 "maintainance" for what a 1/52 share of a single unit? Does anyone believe for a second that "maintainace" a single unit runs in excess of 55k a year?????

I agree I think it is highway robbery. :(

At $1250 "maintainance" for what a 1/52 share of a single unit? Does anyone believe for a second that "maintainace" a single unit runs in excess of 55k a year?????

Actually, $65,000! :eek:

Regardless of whether owning a TS is a good deal or not, has nothing to do with the issue of the state of HI imposing taxation without representation.

They are railroading legislation through knowing those it affects can't vote them out.

The only "voice" I have is to go elsewhere, but alas I am sure that it just means someone else will "snap up" the unit and spend their vacation dollars there any way.

They are railroading legislation through knowing those it affects can't vote them out.

Not directly, but I'm guessing the timeshare developers and peddlers have a significant lobby going in Honolulu. They might get more determined to fight candidates who support this tax increase. If this keeps up, the scam, er I mean valuable part of the state's tourism industry, will suffer.

At $1250 "maintainance" for what a 1/52 share of a single unit? Does anyone believe for a second that "maintainace" a single unit runs in excess of 55k a year?????

"Maintenance" includes the entire property and grounds, landscaping and gardening, pools, spas, fitness rooms, not just what is inside the unit. It also includes real estate taxes, utilities, and the operation of the front desk, housekeeping, etc. Furniture and carpeting inside the room have to be replaced every 5 years (at least they should be) because people don't treat this stuff like they do their own stuff - as an example, they will sit on the couch while they are covered with oily sunscreen. Instead of showering outside when they come out of the ocean, they will come up to their room and shower while still covered with sand, clogging the drain pipes. Obviously, this isn't everybody, but it does describe a lot of people. $55,000 per year might be a little high, but it is not too far out of line for this type of operation.

Read an article in the Hawaii Times this past trip out. Senate shot down huge tax increases in its Budget as well. Seems like there is budget problems for the entire State, and the Children were denied their much needed 180 school day state mandate.

I think fee simple time share owners shouldn't have to pay the tax, simply because they are considered real estate owners.

So, as I understand it, wealthy people who have beachfront second homes pay only standard real estate taxes during their visits, but ordinary sclubs who (wisely or not) invested in a piece of "Paradise" are multiply taxed at a rate many times higher.

Why not just post a sign next to the agricultural inspection machine at the Honolulu airport?

"Thank you for coming to Hawaii, but please...please!...don't even THINK of coming back on a regular basis unless you are very, very rich."

This is the honest message the state is trying to send visitors.

So, as I understand it, wealthy people who have beachfront second homes pay only standard real estate taxes during their visits, but ordinary sclubs who (wisely or not) invested in a piece of "Paradise" are multiply taxed at a rate many times higher.

Why not just post a sign next to the agricultural inspection machine at the Honolulu airport?

"Thank you for coming to Hawaii, but please...please!...don't even THINK of coming back on a regular basis unless you are very, very rich."

This is the honest message the state is trying to send visitors.

Welcome to FT!

In Hawaii during spring break this last time out.. I've read a few articles in the local paper regarding the State being tight on the budgets.. and trying to finds ways of recuperating tax dollars to fund the state system..

Hawaii.. Education as an example.. is struggling with sending their kids to the lowest amount of in class time in the nation..

Until, the tourism heals up, I'm afraid Hawaii is going to try and collect revenues from the sources they least encounter resistance..

Just got back from my vacation at St. John USVI that I traded my Maui timeshare for directly because of the legislation you passed. Beautiful weather (80 degrees every day). Beautiful beaches. Sorry Maui, I spent my vacation dollars elsewhere because you hate us.

For $1,250 + the PV of the $45K investment, OP could likely fly paid F out to OGG and stay at the Ritz for substantially less than what he's into *W for on this thing.

Timeshares are almost universally a terrible deal and probably won't begin to even minimally recover in the next decade.

I would dump the TS for whatever you can get, forget about it, move on and pretend it didn't happen.

Just got back from my vacation at St. John USVI that I traded my Maui timeshare for directly because of the legislation you passed. Beautiful weather (80 degrees every day). Beautiful beaches. Sorry Maui, I spent my vacation dollars elsewhere because you hate us.

It looks like you are from CT. If so, you had alot less jet lag, flight time, and time changes to deal with by choosing the USVI.

I give you credit for voting with your pocketbook.

Timeshare resale values have dropped imo.. I think the market priced in the additional taxes, and prices are reflective of the overall benefit..

But, having looked at time shares over the years, its hard to be tied down to one property, and some inflexible dates.. I have a tough enough time booking the hotels I want to be at with the dates I want in Hawaii.

Just got back from my vacation at St. John USVI that I traded my Maui timeshare for directly because of the legislation you passed. Beautiful weather (80 degrees every day). Beautiful beaches. Sorry Maui, I spent my vacation dollars elsewhere because you hate us.

Funny, I traded my Maui week for St. John this year, too. Had a fabulous time. Still like Maui better, but I'm not a fan of the way they treat me.

Hawaii is in rough shape economically and they're looking to tax anyone and everyone into oblivion to maintain the status quo for our state government. Timeshare owners are an easy target because they can’t voice their complaints with votes. The Governor has made it clear that he will do whatever he wants regardless of who it affects. Hawaii is an overwhelmingly democratic state; the house, senate, and governor are all democratically controlled so there are no checks in place. I expect a lot more new taxes in place before the 2012 elections roll around. Welcome to the so called “price of paradise.”

Yes you nailed it right on the head. It's just another way to subsidize reckless spending and entitlements

wow so much hate for a tax increase...if you guys are so against it..why not move here...declare residency then vote these guys out? I'm sure that someone who lives in Hawaii and owns a time share will be representing you...

also state doesn't collect property taxes..its the republican mayor(honolulu) who does that...

tat is another issue though...

the whole point is unless people stop coming here...and stopping demand, prices will continue to increase...thats how it works generally...

Yes you nailed it right on the head. It's just another way to subsidize reckless spending and entitlements

Welcome to FT!

I think the tax revenue is on the way side as a result of reduced tourism.

wow so much hate for a tax increase...if you guys are so against it..why not move here...declare residency then vote these guys out? I'm sure that someone who lives in Hawaii and owns a time share will be representing you...

also state doesn't collect property taxes..its the republican mayor(honolulu) who does that...

tat is another issue though...

the whole point is unless people stop coming here...and stopping demand, prices will continue to increase...thats how it works generally...

Timeshares for vactioners.. but who wants to vacation near home. Hawaii is still fabulous.

I just paid the tax at the WPR. My approach will be a little different than others:
- I exchanged for a week in Princeville, and at no time did SVO advise me of this tax. Nor did the resort! On arrival, they review all kinds of charges for golf, etc. Why didn't they advise me of a new tax imposed by the State??
- what is the tax based on? 2 % of what? IF the WPR values exchange weeks at $50, then 2 % is $1 - which is a lot less than what I paid!
I am seeking a full refund from SVO, or alternatively, the resort. I will post the results.........stay tuned.

I just paid the tax at the WPR. My approach will be a little different than others:
- I exchanged for a week in Princeville, and at no time did SVO advise me of this tax. Nor did the resort! On arrival, they review all kinds of charges for golf, etc. Why didn't they advise me of a new tax imposed by the State??
- what is the tax based on? 2 % of what? IF the WPR values exchange weeks at $50, then 2 % is $1 - which is a lot less than what I paid!
I am seeking a full refund from SVO, or alternatively, the resort. I will post the results.........stay tuned.

imo.. tax is tax and I'm not staying tuned always to what taxes are being charged, but I do see your point.. Recently I booked a condo unit, and before I committed to booking, I called the front desk, and they assured me that there was towel service, and once a week sheet changes included for all guests. Voila, after the booking the services were a la carte, but the condotel was pretty good at trying to make me happy after the fact. The point is, please inform us in reasonable fashion.

It would be hard to inform everyone prior to arrival about a tax increase. What would be an appropriate method? Email?

It would be hard to inform everyone prior to arrival about a tax increase. What would be an appropriate method? Email?

I beg to differ! I get dozens of e-mails a year from SVO. I would think that one of them would at least mention news of relevance to timeshare owners who may be planning to visit Hawaii! Yet, I searched my e-mail box and found zip about the TATT tax!