- Florida House Bill 451 was approved by the House Ways and Means Committee on Friday, which could lead to new timeshare appraisal regulations.
- The bill would change the way timeshare properties are valued for property tax purposes, using the actual value instead of the pre-sale value.
- The potential negative fiscal impact on local municipalities and counties is a point of contention, but Rep. Randy Fine, who introduced the bill, contends that it serves as a course correction within the state’s timeshare market.
House Bill 451, introduced by Rep. Randy Fine, was approved by the House Ways and Means Committee on Friday by a fourteen to two margin, potentially establishing new timeshare appraisal regulations.
Fine’s legislation seeks to change the methodology of how timeshare properties are valued for property tax purposes. The bill establishes that the actual value of timeshares, rather than the pre-sale value, is used in order to determine the property tax that a timeshare owner pays.
The bill contains provisions that determine whether a property appraiser’s evaluation of a timeshare property can be challenged. If challenged, the number of timeshare property resales can be considered sufficient if the taxpayer claims that the number of resales is reasonable according to the Uniform Standards of Professional Appraisal Practice.
Current state law requires property assessors to first consider the number of timeshare properties that have been resold to calculate their worth. In case there is an insufficient number of resales, the appraiser must determine the original buying price and subtract reasonable fees and expenses of the sale, as stated in the bill.
“What prompted me to run this bill was … individual consumers who owned timeshares who bought it and then can’t sell them for much, yet they are being assessed property taxes an order of magnitude higher than what the value of what they could sell it for was,” said Fine.
A point of contention in the bill, raised by Rep. Daryl Campbell, is the potential negative fiscal impact the measure would impose on local municipalities and counties. According to a legislative analysis, Fine’s bill is forecasted to have a negative recurring impact on local government property tax revenues of $208.2 million. The impact is broken down between $77.5 million in school taxes and $130.7 million in non-school taxes, beginning in the fiscal year 2023-24.
Fine, however, contends that though the regulation could be defined as negative fiscal impact, it serves as a course correction within the state’s timeshare market.
“I think you can make an argument that there would be less tax revenue available,” said Fine. “Let’s assume you could sell your house for $100,000, yet the property appraiser is valuing it at $300,000 — three times what you could actually sell it for. Yes, if they value it appropriately at $100,000, you’re going to pay less taxes. That will have a negative fiscal impact, but is it fair to the person who owns a $100,000 house to pay taxes on it at $300,000?”
In Florida, timeshares are treated as real property and are thus subject to property taxes. The value of the timeshare property is assessed by the county property appraiser, who determines the fair market value of the property as of January 1 of each year.
The property appraiser typically considers a variety of factors outside of total resales when determining the value of a timeshare, including the size and location of the property, the age and condition of the building, offered amenities, and recent sales of comparable properties.
“I just don’t think it’s fair to charge someone taxes on something it isn’t worth,” said Fine. “Your taxes should be based on what something is worth.”
Florida has emerged as one of the most popular destinations for timeshare vacations in the nation, serving as a significant contributor to the state’s tourism industry.
According to the American Resort Development Association, Florida has the largest number of timeshare resorts in the country, with over 360 resorts and more than 1.8 million timeshare owners. The industry generates billions of dollars in annual revenue and employs thousands of people.