Some questions for any Canadian DVC owners out there

[nodes101]

I posted this quesiton on DVC Purchasing and got no love. So I'm putting the same question here for my fellow Canadians.

We are currently researching buying into DVC. For a trial run we are renting points for a stay later in the year and we've considered buy in because our kids are little and we can see ourselves coming back often for many years. But if its a timeshare, is it considered a real estate purchase? Are there tax implications for Canadians? Are we going to have to file US taxes? If we decide to sell in the future? Any thoughts or experiences of fellow Canadians buying/selling/renting out DVC pts would be very helpful!!

If there's already a thread on this topic please point me in the right direction.

Thanks!!



forum

 

[tgropp]

No there is no income tax implications nor regarded as a real estate transaction. When you sell the U.S. government takes around 10%. We own at Boulder Ridge and Beach Club villas but we purchased at $80 per point and the Cdn dollar was approx $1.10 at the time. In all honesty I would never buy DVC at the price that they want now. I would buy resale and if the perks mean a lot to you I would then purchase a very small contract directly from Disney. Either way you will have loads of great vacations.

 

[mort1331]

We were able to buy around the same time as tgropp. So we were grandfathered in for the benifits.
Now i have not filed for any tax on either side of the boarder. I have rented my points for small amounts that dont really want to bother about. Yes there are haters about that but im not going to try and figure out if i can claim dues and buy in and all the other stuff for such a small amount.
For selling, we have not yet. But they did increase the holding tax to 15%. So depending on if and when and the amount we will see if its worth worring about letting the US tax system have my info. Prob not.
Renting is a great way to try out and see if the upgrade from value is worth it for you. And your not locked in long term. The only thing that swayed us to buy this timeshare was we figure there will be some resale value IF we need to get out. All other TS we looked at they are worth nothing after you sign. Less than driving a new car off the lot.
Do your research. Ask lots of questions.

 

[Greg36]

We own three contracts, two of which are resale. We have never had to file anything with the IRS. We have never rented our points but if you do there are Canadian, federal US, and state tax implications. If you do sell there is a 15% holding tax. Depending on which part of Canada you are in DVC might not be able to sell to you unless you are physically in Florida. You can buy resale from anywhere though.

 

[Minniemoo15]

We just bought last year, resale. The perks would have been nice but we saved over $25,000 CDN and there’s no way the perks would be worth that for us. We love it, so far!

 

[nodes101]

Thanks everyone the responces! Resale definitely seems to be the way to go and I'm watching the resale prices for a couple different resorts.

I was wondering when you were pricing it out did you take the cost of airfare into account? Does anyone drive anymore? I have lots of memories driving to florida as a kid but it seems now everyone flies. We are in southern Ontario so I guess it makes a big difference where in Canada you are.

 

[tgropp]

Haven’t driven to Florida since 1980. Most of my Florida flights are Air Miles but this Dec we got Air Transat flights for $305 and Swoop is less than that

 

[Mikamarii]

We just sold our dvc (closed today actually). There are definitely tax implications if you rent or sell you points as it is considered income. You have to pay taxes in both US and Canada. You dont have to pay twice. Pay US first and use that as credits towards the CRA. You have to factor in the dollar as well. We bought when the dollar was above and sold when the dollar was well below. You have to calculate your gains based on the dollar when you bought and again when you sell.

When you rent its up to you whether you want to claim it. I have friends who have been audited before and it's no fun. I wouldn't want to be on the radar for both CRA and IRS. It's like many forms of income that people choose to or not to claim. Entirely up to you but if they catch it it can have implications.

When you sell the title company automatically withholds the FIRPTA 15% tax. We hired a US accountant to calculate our gains and apply for a certificate which allows the title company to release the 15% if you can prove the tax you would owe(on your gains) is less than that 15%. Otherwise you have to file a US tax return to get it back. It sounds very complicated but once you work through it it makes more sense.

 

[mort1331]

Thanks everyone the responces! Resale definitely seems to be the way to go and I'm watching the resale prices for a couple different resorts.

I was wondering when you were pricing it out did you take the cost of airfare into account? Does anyone drive anymore? I have lots of memories driving to florida as a kid but it seems now everyone flies. We are in southern Ontario so I guess it makes a big difference where in Canada you are.

We do both. This spring we are driving. Last summer we flew. Depends on what we want to do and how long we are going for. We are in the GTA and half fly out of TO and half out of Bufflo.

 

[disneykins]

We bought in 1993 when it was only OKW and Vero. Our kids were 6 & 4 and we had some amazing holidays, every year for 15 years, sometimes twice a year. Also exchanged for cruises, Disneyland Paris twice and Aulani once. It was very expensive for us when we got in (I know $50 a point looks like a steal now) but we wanted the quality and knew we'd go back many times. Last 4 or 5 trips have been just DW and myself since we retired and we're still loving it. Going next week actually. Hoping to do Shanghai and Japan in the future.
On renting, we've done it a few times through Davids (he's actually based in London, Ont like us). Great way to rent and we've never claimed it as income and haven't had a problem yet.

 

[nodes101]

Yes we are renting through Davids for this trip to try out OKW ourselves. I was surprised to find out David's is in Londond (and acutally based only blocks from my dad's old work from when I was a kid). There's so many factors to consider like the upfront cost of points, availability, how frequently we want to do disney, onsite vs offsite, annual dues. We are looking forward to trying it out and hopefully it will help us decide.

We will be driving down as well and making that part of the trip, I'm looking forward to it. I grew up drving to florida through many winters of the 80's and 90's, my parents couldn't afford flights for a family of 5. It seems now you can find discounted flights from Buffalo, Toronto and even Hamilton airport that make it close to cheaper than driving when you factor in gas, food and hotel. But I look at it as part of the vacation and good for the kids to have to learn to get along. also, i get to stop at some sweet southern bbq places along the way if i plan it right.

 

[disneykins]

Yes we are renting through Davids for this trip to try out OKW ourselves. I was surprised to find out David's is in Londond (and acutally based only blocks from my dad's old work from when I was a kid). There's so many factors to consider like the upfront cost of points, availability, how frequently we want to do disney, onsite vs offsite, annual dues. We are looking forward to trying it out and hopefully it will help us decide.

We will be driving down as well and making that part of the trip, I'm looking forward to it. I grew up drving to florida through many winters of the 80's and 90's, my parents couldn't afford flights for a family of 5. It seems now you can find discounted flights from Buffalo, Toronto and even Hamilton airport that make it close to cheaper than driving when you factor in gas, food and hotel. But I look at it as part of the vacation and good for the kids to have to learn to get along. also, i get to stop at some sweet southern bbq places along the way if i plan it right.

I wasn't sure about Davids before using them, so I just showed up at their office about 2 minutes from where we live. They were surprised we were able to track them down, lol, but they were great, showed us around the office, explained everything to us. We're older so it put our minds at ease that they were exactly what they said they were on the internet. We have since rented our points through them on 4 different occasions and we usually get enough to cover our maintenance fees for 2 years.
We are leaving tomorrow to drive down I-75 for the first time in years. Like you, we used to drive when the kids were young but when they moved on, it became cheaper and easier to fly. This is our first year to drive and stay in FL for a few months, so we'll see how we like the drive.

 

[Mikamarii]

There's so many factors to consider like the upfront cost of points, availability, how frequently we want to do disney, onsite vs offsite, annual dues. We are looking forward to trying it out and hopefully it will help us decide.

We had rented through David's a couple times and that's one of the reasons we had comfort in selling. Knowing that options were available.

DVC is great and if you can afford it its is a fantastic option for frequent travels to Disney. We are on the west coast so it's not as quick for us to get to Disney thus making it harder and harder to go every year. Theres no weekend getaway when you need a full day of just travel on either end.

No matter how much you love disney its important to weigh the logistics of a disney trip every year or other year as it is not cheap and not getting any cheaper. Plus, as we learned this past January trip, there are no slow times at Disney anymore.

We owned for ten years. Bought on our honeymoon for about 105pt direct from disney when the dollar was above. We had many great trips and experiences. But a lot can change. We have 2 kids now and, while we have amazing memories from multiple trips, they've grown up and with activities and school it's not as easy to get away and money isnt as readily available as it was pre kids!

Wife and I talked and talked about it and decided we cant afford multiple disney trips and other trips we want to take if we keep dvc. We sold, not out of financial need but it was a smart financial decision. We are lucky as we made a hefty profit. That may not always be there.

With the cost of DVC now and the dollar the way it seems less of a value to buy in right now. Plus this past trip is the first we've rented a car. Inwas absolutely floored by how many great hotels there are so close to disney. Many after the same advantages as staying on site. Plus so many food options so close.

I guess what I'm saying is I dont know you or your situation haha. Weigh the pros and cons but honestly renting seems to be a much more fiscally responsible way to use dvc vs buying. No upfront costs, not being locked in, and some flexibility to hand pick the years you want to go.

 

[Days In the Sun]

There are definitely tax implications if you rent or sell you points as it is considered income. You have to pay taxes in both US and Canada. You dont have to pay twice. Pay US first and use that as credits towards the CRA. You have to factor in the dollar as well. We bought when the dollar was above and sold when the dollar was well below. You have to calculate your gains based on the dollar when you bought and again when you sell.

When you rent its up to you whether you want to claim it. I have friends who have been audited before and it's no fun. I wouldn't want to be on the radar for both CRA and IRS. It's like many forms of income that people choose to or not to claim. Entirely up to you but if they catch it it can have implications.

Completely agree. We do not rent out our points due to the tax implications (too much hassle for the amount earned), we would never consider not paying US and Canadian taxes owing. You never know when something like that might catch up to you.

 

[nodes101]

We had rented through David's a couple times and that's one of the reasons we had comfort in selling. Knowing that options were available.

DVC is great and if you can afford it its is a fantastic option for frequent travels to Disney. We are on the west coast so it's not as quick for us to get to Disney thus making it harder and harder to go every year. Theres no weekend getaway when you need a full day of just travel on either end.

No matter how much you love disney its important to weigh the logistics of a disney trip every year or other year as it is not cheap and not getting any cheaper. Plus, as we learned this past January trip, there are no slow times at Disney anymore.

You bring up some of really good points. We are renting points for our stay this October as a trial run of sorts both for buying and renting.

First we are generally long range planners which seem to work well with renting. I'm sure it doesn't hurt with owning and booking DVC points as well. Owners can correct me if i'm wrong here but it seems last minute trips, especially the shorter kind are possible if you are an owner and especially if you are looking at 1 and 2 bedrooms villas. But they seem to be very hard to book when renting. This isn't really a problem for us as we do like to plan trips out months if not a year in advance because we have to coordinate work schedules. So renting seems to be a great fall back for us.

On the financial side it seems renting is a good way to save on one off trips. No need for big payment up front, no dues, just pay around 18-19$ per point for the points you need for the vacation you want. That would be about double the cost of annual dues on those points (depending on resort) but a heck of a lot less than rack rates. Also you brought up the exchange rate was much better several years ago with the Canadian dollar higher than the US$ a few years ago. Its not as bad as it was during the 90's and early 00's now but its not great right now. So from that perspective there's some added risk and cost with buying this year.

Another thing you brought up was reselling later possibly for even a profit. I think this is one major advantage of buying. DVC seems to be one of the few programs that hold value and point values are only going up. But i don't think you can trust that will always be the case. You never know what my happen in the future with Disney, what rules they may change, what impact the new resorts may have and the limitation Disney imposes, the raising cost of dues and its impact. Especially like you said since there are so many options to stay off site. Last time we visited Disney 3 years ago we rented a condo nearby and it was a fraction of the cost of staying on site. I think you can likely expect to resell and not loose money but there's not guarantees.

I ran some numbers when we first booked our rental with some general assumptions. I considered cost of points on resale market (the added benefits of buying direct from Disney don't seem to make sense in our situation but that's just us), annual dues, 1 trip every year and a second analysis with trips every 2 years, to come up with an estimated total cost of ownership over 20 years. then I compaired that against renting points with the same number of stays to give me an understanding and i was really surprised that it made a bid difference which resort you bought points at but in some cases renting was significantly cheaper. That is until you consider the possibility of reselling those points at the end. at which point you realize you had all those stays for the cost of annual dues assuming you can resell for at least the same point value you bought at. Now theres a LOT of assumptions there but I like playing with the numbers so it was interesting to see .

So these are all things we are considering which you touched on. Would love to hear if my thinking makes sense? especially some of my assumptions like potential resale value, and impact of exchange rates.

 

[nodes101]

Haven’t driven to Florida since 1980. Most of my Florida flights are Air Miles but this Dec we got Air Transat flights for $305 and Swoop is less than that

We've considered Swoop since we are close enough to Hamilton airport but we've also heard some horror stories of late or cancelled flights from them and costomer service issues. I guess its not to different from Westjet or AirCan but being a newer airline the issues sort of stick out.

Right now our preference is to drive, mostly because i'm looking back at my youth with rose coloured glasses and think the drive would be a fun extension of the vacation. Flying is seldom fun and flying from Pearson is never fun. I'll let you know afterwards how 10 hours/day in the car with the kids went unless we change our minds.

 

[bbangel]

When I made the decision to buy I factored in the cost of flights and tickets (with a yearly increase). I too bought resale when the dollar was at par. If I did the same calculation with the dollar today I probably wouldn't buy. I for sure would not buy direct from Disney (that didn't even make sense when are dollar was above!) I've owned for almost 12 years and have found that my travel habits have changed and have considered selling. Given where prices are for resale right now I would make money over my purchase price, leaving my travels just the cost of dues. Not sure how much longer that will continue with the expiry dates getting closer.

 

[clarker99]

You bring up some of really good points. We are renting points for our stay this October as a trial run of sorts both for buying and renting.

First we are generally long range planners which seem to work well with renting. I'm sure it doesn't hurt with owning and booking DVC points as well. Owners can correct me if i'm wrong here but it seems last minute trips, especially the shorter kind are possible if you are an owner and especially if you are looking at 1 and 2 bedrooms villas. But they seem to be very hard to book when renting. This isn't really a problem for us as we do like to plan trips out months if not a year in advance because we have to coordinate work schedules. So renting seems to be a great fall back for us.

On the financial side it seems renting is a good way to save on one off trips. No need for big payment up front, no dues, just pay around 18-19$ per point for the points you need for the vacation you want. That would be about double the cost of annual dues on those points (depending on resort) but a heck of a lot less than rack rates. Also you brought up the exchange rate was much better several years ago with the Canadian dollar higher than the US$ a few years ago. Its not as bad as it was during the 90's and early 00's now but its not great right now. So from that perspective there's some added risk and cost with buying this year.

Another thing you brought up was reselling later possibly for even a profit. I think this is one major advantage of buying. DVC seems to be one of the few programs that hold value and point values are only going up. But i don't think you can trust that will always be the case. You never know what my happen in the future with Disney, what rules they may change, what impact the new resorts may have and the limitation Disney imposes, the raising cost of dues and its impact. Especially like you said since there are so many options to stay off site. Last time we visited Disney 3 years ago we rented a condo nearby and it was a fraction of the cost of staying on site. I think you can likely expect to resell and not loose money but there's not guarantees.

I ran some numbers when we first booked our rental with some general assumptions. I considered cost of points on resale market (the added benefits of buying direct from Disney don't seem to make sense in our situation but that's just us), annual dues, 1 trip every year and a second analysis with trips every 2 years, to come up with an estimated total cost of ownership over 20 years. then I compaired that against renting points with the same number of stays to give me an understanding and i was really surprised that it made a bid difference which resort you bought points at but in some cases renting was significantly cheaper. That is until you consider the possibility of reselling those points at the end. at which point you realize you had all those stays for the cost of annual dues assuming you can resell for at least the same point value you bought at. Now theres a LOT of assumptions there but I like playing with the numbers so it was interesting to see .

So these are all things we are considering which you touched on. Would love to hear if my thinking makes sense? especially some of my assumptions like potential resale value, and impact of exchange rates.

This all sounds familiar as my wife and I are in serious thoughts to buy into DVC. I have done all the same math and I believe it makes sense vs paying cash for rooms or renting points. Plus, room rates (on and off property) are gonna keep going up. We stay primarily at POP and with the skyliner now there, I am guessing it will be >$250USD/night within 5yrs. Meanwhile, if you buy DVC today you get todays value (in USD) for as long as you own your contract. Your home resort will always have the same amount of points. For those complaining about the dollar, how can we know at all where the dollar will be in 5, 10, 20 years? Could be 60 cents for all we know. Plus, sounds like we are in different phases of life. We have young kids and are going every year (if not twice).

DVC holds its value and even the 2042 properties are still going up in resale value. How long will that last? Still 22years away.

For us we are trying to decide if we go all in right away or build up points over a few years with add-ons. In the end, it isn't about the money bc we are already spending it at Disney. It is about enhancing our stay with better, more spacious accomodations and some flexibility to stay in different resorts which we never pay to stay at because of the price tag.

 

[mort1331]

This all sounds familiar as my wife and I are in serious thoughts to buy into DVC. I have done all the same math and I believe it makes sense vs paying cash for rooms or renting points. Plus, room rates (on and off property) are gonna keep going up. We stay primarily at POP and with the skyliner now there, I am guessing it will be >$250USD/night within 5yrs. Meanwhile, if you buy DVC today you get todays value (in USD) for as long as you own your contract. Your home resort will always have the same amount of points. For those complaining about the dollar, how can we know at all where the dollar will be in 5, 10, 20 years? Could be 60 cents for all we know. Plus, sounds like we are in different phases of life. We have young kids and are going every year (if not twice).

DVC holds its value and even the 2042 properties are still going up in resale value. How long will that last? Still 22years away.

For us we are trying to decide if we go all in right away or build up points over a few years with add-ons. In the end, it isn't about the money bc we are already spending it at Disney. It is about enhancing our stay with better, more spacious accomodations and some flexibility to stay in different resorts which we never pay to stay at because of the price tag.

Dont forget about the yearly MF. They can add up so factor that in too

 

[Mikey15]

Dont forget about the yearly MF. They can add up so factor that in too

True, that will always need to be paid in USD, no avoiding fluctuation there. That said, at $7, $8, $9 MF per point, you’re ballpark $1,000 USD a week for a studio, or $2,000 USD a week for a 1bdrm. Not bad compared to a week at a Value for what you’re getting, and I don’t think MFs are going up as quickly as cash room rates.