Webb and Lehrer Write on Sales and Real Property/Ad Valorem Tax Considerations in Top Vacation Ownership Industry Magazine

Articles / June 14, 2012

Real Estate Partner Rob Webb and Income Tax Partner John Lehrer published “Short-Term Timeshare Product: Sales and Real Property/Ad Valorem Tax Considerations” in the June issue of Developments, the magazine of the vacation ownership industry.

In their article, Webb and Lehrer explain that the real estate underlying any timeshare product is always subject to real property/ad valorem taxes. And in instances where the timeshare product involves the separation of the use rights away from the underlying real estate, they point out that it is likely that the sale of the use rights also will be subject to sales and use taxes.

Their article defines sales and use taxes versus real property/ad valorem taxes as well as discusses the short-term timeshare product, most of which, Webb and Lehrer note, will lack a related real estate interest and will be timeshare licenses by necessity.

Without a change in applicable laws or creativity within the product terms, they conclude that short-term timeshare products will be subject to costly sales and use taxes.

Read full article.

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