Thursday, October 27, 2005
Timeshare Industry Wants Tax Relief
The timeshare industry wants the town to stop charging a real estate transfer tax on owners who upgrade the quality of their weeks within their complex.
“I am here to emphasize a fairness issue,” said Tobias Weas, counsel for the American Resort Development Association.
Weas and owners at local complexes such as the Valdoro Lodge object to the town collecting its 1 percent real estate transfer tax on upgrades.
Other big Breckenridge timeshare projects include Gold Flake, Grand Timber lodge, the Marriott and Hyatt’s Main Street Station.
An example would be that if an owner upgrades a $30,000 summer week to a $40,000 winter week, current law taxes the entire $40,000 transaction and not the $10,000 upgrade.
Weas said the tax is unfair because the owner is trading the $30,000 week back to the developer to be sold to somebody else, and only paying $10,000.
Weas argued that an upgraded timeshare represents a shift in time, not a bigger piece of real estate.
Councilmembers J.B. Katz and Eric Mamula wondered how that should be treated differently than any other real estate upgrade when under Colorado law the shift is still a deeded transaction.
Weas said the difference is that the upgrades he wants to protect occur in the same complex with the same developer.
He also said the timeshare does not build equity like traditional real estate.
“We are not an equity-building home owning product,” he said. “We are a vacation use product.”
Town manager Tim Gagen said it’s difficult to figure what revenue the town would lose, but in the last two years, timeshare resales generated $108,000 in 2003 and $87,000 in 2004.
Town officials will research how other towns with real estate transfer taxes treat timeshare upgrades and report back to council.
Councilmember Rob Millisor, a timeshare business owner, recused himself from the discussion.
“I am here to emphasize a fairness issue,” said Tobias Weas, counsel for the American Resort Development Association.
Weas and owners at local complexes such as the Valdoro Lodge object to the town collecting its 1 percent real estate transfer tax on upgrades.
Other big Breckenridge timeshare projects include Gold Flake, Grand Timber lodge, the Marriott and Hyatt’s Main Street Station.
An example would be that if an owner upgrades a $30,000 summer week to a $40,000 winter week, current law taxes the entire $40,000 transaction and not the $10,000 upgrade.
Weas said the tax is unfair because the owner is trading the $30,000 week back to the developer to be sold to somebody else, and only paying $10,000.
Weas argued that an upgraded timeshare represents a shift in time, not a bigger piece of real estate.
Councilmembers J.B. Katz and Eric Mamula wondered how that should be treated differently than any other real estate upgrade when under Colorado law the shift is still a deeded transaction.
Weas said the difference is that the upgrades he wants to protect occur in the same complex with the same developer.
He also said the timeshare does not build equity like traditional real estate.
“We are not an equity-building home owning product,” he said. “We are a vacation use product.”
Town manager Tim Gagen said it’s difficult to figure what revenue the town would lose, but in the last two years, timeshare resales generated $108,000 in 2003 and $87,000 in 2004.
Town officials will research how other towns with real estate transfer taxes treat timeshare upgrades and report back to council.
Councilmember Rob Millisor, a timeshare business owner, recused himself from the discussion.
# posted by John @ 8:35 AM 
