Recently, there are reports claim that more and more Hawaiian owners who are getting out of their timeshares as well as getting it foreclosed due to property tax surges. The property values around the region are dropping and Maui, the second-largest of the Hawaiian Islands is no exemption of this. As we recall last year, the property taxes on Maui have doubled and this raised concerns from timeshare owners.
The timeshare owners around the area are complaining that they are burdened by a consistently growing property tax that is not applicable to permanent residents in the island. Meanwhile, as the county government of Maui has been experiencing budget shortfalls, it is recuperating some of its losses through property tax increases. Such move is made at the expense of Maui timeshare owners, thus, resulting into hundreds of foreclosures.
The American Resort Development Association or ARDA says that the case is the first of its kind. Maui is the first local government to set up a separate tax category for timeshare owners based on a legislation that was approved in 2005. This resulted to the island’s tax rate for timeshares being the highest in the nation. On the other hand, timeshare default rates on the area are still low at 5%.
The surge of taxes in Hawaii resulted to the many owners trying to get rid of their timeshares. Some of these owners even hire a timeshare transfer company such the Transfer Smart. Moreover, this also led to many foreclosures in the region. As it has opened up a new market for timeshare bargain hunters, such foreclosures sell timeshare properties at very low rates and likely will to be taken advantage of by foreigners.