Some questions for any Canadian DVC owners out there

[nodes101]

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.

You are right, sounds very familiar. I don't' think we are in as different phases are you may think. I have to small disney obsessed princesses myself. But the world is a big place and there are other things we'd like to do and places to show them. As much as we all love Disney we are thinking once a year or ever other year as to keep things varied.

Personally I like the idea of buying small at first and building up. Less up front cost and also let the membership grow with us as we decide to go more or pick more bigger villas as the kids want (and allow us) more privacy.

I admit I am a little concerned with the 2042 properties holding their value for resale especially after about 10-15 years. I can see those contracts dropping to pennies on the dollar in their final years. I'm more inclined to look at resorts with longer terms available for that reason because i love the idea of recouping part of my investement if and when the Disney magic wears off.

 

[kiford]

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?

...nor regarded as a real estate transaction.

Yes, it is absolutely considered real property and is subject to some, though not necessarily all, real estate laws and there are closing costs associated with purchasing a contract in the same way you'd be charged for direct purchase of a house in the US. Tax implications only kick in if you rent out your points or sell. No, you do not have to file US taxes as a result of the purchase, however, if you spend over the maximum number of days in the US using the bizarre calculation (which accounts for days spent not just in the prior year but a percentage of years before that) you may have to file taxes as a US resident. Nothing to do with owning property, but you may end up spending more time there as a result of owning, so beware of that. Our accountant makes us calculate it regularly to make sure.

Although there are no US taxes, you should be careful about personally owning real property in the US, especially in Florida as your estate may need to be probated in the US as well as Canada (plus additional probate fees - up to 3% of the value of all US property) if you still own it on your death and it can slow down the disposition of your estate considerably which is a concern if you have children. DH and I have incorporated a company (for reasons other than this) but it will own the DVC points and thus there are no probate issues as the company never dies even if we both do. We will also be able deduct the maintenance fees against any rental income. I would absolutely not consider renting out the points without declaring and paying taxes if necessary; there are tax treaties between the US and Canada and the odds that they will eventually find out are reasonably high and not worth the risk (or fines).

 

[clarker99]

I admit I am a little concerned with the 2042 properties holding their value for resale especially after about 10-15 years. I can see those contracts dropping to pennies on the dollar in their final years. I'm more inclined to look at resorts with longer terms available for that reason because i love the idea of recouping part of my investement if and when the Disney magic wears off.

2042 is something we are wary of as well. The more I think about it, Disney will likely run out the deeds then refurb/update the rooms and re-sell the points direct at rates more in line with prices of the 2040's. BWV and BCV are such prime real estate and those point charts (esp BWV) are relatively cheap compared to newer properties.

Will Disney offer something to existing 2042 owners? I just can't see Disney letting so many DVC members walk and doesn't seem like a very DVC thing to do to let the contracts become pennies on the dollar. Maintaining DVC value seems like a Disney priority.

 

[bbangel]

They tried to extend OKW with an offer to existing owners and there was not enough take up. More likely the plan is to have the points come back to Disney, the resorts refurbished and the points resold at a higher cost as a "new" property. This will allow them to change the point charts so they are more in line with properties currently being built. They don't need to retain current owners as there are always new ones coming in behind them

 

[nodes101]

They tried to extend OKW with an offer to existing owners and there was not enough take up. More likely the plan is to have the points come back to Disney, the resorts refurbished and the points resold at a higher cost as a "new" property. This will allow them to change the point charts so they are more in line with properties currently being built. They don't need to retain current owners as there are always new ones coming in behind them

I had heard about that. So does that mean the entire OKW extension was cancelled? or do some people have OKW point contracts beyond 2042? Id be interested in hearing the background on that.

thanks!

 

[clarker99]

I had heard about that. So does that mean the entire OKW extension was cancelled? or do some people have OKW point contracts beyond 2042? Id be interested in hearing the background on that.

thanks!

There are some 2057 contracts at OKW via this limited time extension period. They are fairly rare but do pop up on re-sale sites. Also, I am pretty sure you can buy 2057 OKW contracts direct from Disney for $165/pt. Just have to go on a waitlist till more points come available (i.e. When Disney choose to use the ROFR on resale they turn around and sell direct). Others can correct me if I am wrong.

 

[Mikamarii]

If you dive deep enough in to some of the dvc threads the okw extension gets talked about and the general consensus seems to have been a disaster from a disney point of view. It put them in a precarious position when the 2042 contract expires. They cant really make any changes to point charts if others are still under contract for another 15 years and they may not want to do major renovations as there will be many with 15 years still left on the contract.

Everything is speculation at this point but I cant see disney every offering another extension. At some point the hotel market will be saturated and as resorts start to expire they are sitting on a potential goldmine. They can renovate the existing buildings for a fraction of the cost to build a new one and re sell at current or near current prices with a brand new contract length.

If it's one thing we learned over the past 10-15 years is dvc is a hot commodity and a huge profit for the company. It's possible it slows down but this time seems unlikely.