Disney challenging property tax valuations

[tjkraz]

I ran across this info when buying last October. I'm a little concerned, but then looking at the property tax portion of dues on BWV (where I purchased), over the last 10 years the amount going toward the taxes has gone up by about 50% but really that amounts to about $.50/pt.....over 10 years. Kind of puts it in perspective.

Thing is, after owning for 5-10-15 years, it often seems like one thing or another. One year the operating budget gets an abnormally high bump because DVC claims they're putting new housekeeping procedures in place. Next year gas prices rise and transportation line item balloons. Next year a hurricane hits FL and it's insurance rates. Then taxes, capital reserves..the list seems endless.

Before you know it, you're seeing total dues increases of 4-8% every single year, which is obviously faster than wages are rising.

Now, I'm too lazy to go looking up actual #s right this minute, but I think the current tax portion of our dues is around $1.50 and I believe there is a cap on annual tax increases of 10% annually.

Incorrect. There is a cap on the amount operating costs may rise in a year but there is zero cap on tax rates. Whatever the county assesses is that owners pay. Unless rates are successfully challenged.

Then I think about CCV and believe that property would not likely be affected by a reassessment because it should already be pretty "accurate", right? Also, it's new, so there shouldn't be a lot of "surprise maintenance" etc. So, will all the other resorts start to catch up to CCV in dues?

History has proven that's not necessarily the case. BLT dues rose very modestly the first two years--while the resort was in active sales. Since then all cost components have cumulatively risen more than 50% in the next 7 years.

Dues are unique to every property, varying depending upon building type & materials, amenities, services provided, type of park transportation, size, etc. One of the biggest factors is the points charts themselves. Since dues are expressed on a per-point basis, the number of points in the resort will impact that rate. A $10 million operating budget will cost "less" if spread over 6 million points than 5 million.

 

[4luv2cdisney]

Incorrect. There is a cap on the amount operating costs may rise in a year but there is zero cap on tax rates. Whatever the county assesses is that owners pay. Unless rates are successfully challenged.

Sorry, I wasn't very clear - I was referring to the 10% cap from the County, but regardless I am wrong as it is 10% on the assessed value not the tax assessed. I researched all this back before I purchased in October and obviously remembered it incorrectly. But still, it does prevent (to some extent) taxes rising dramatically from year to year. Even if the assessment of a particular property went up 300%, the county could only increase the assessment by 10% per year although the tax rate could also increase - so my $.15 assumption is not accurate.

I believe there was also chatter on the fact that if ownership changes the cap does not apply and that somehow being a concern for some DVC properties, but my brain is fried tonight, so someone else can dig into that if they want.

What is the cap on operating costs?

 

[DVCismyhappyplace]

Frankly, I would be upset if Disney did not challenge the assessments each year. In states (like Florida) where one is not penalized for contesting an assessment, I would always recommend filing an appeal.....

 

[cmwade77]

Wow...Disney wants to pay less money to the government, not surprised. LOL

Well, they are challenging some at DVC resorts, which should theoretically mean that owners at those resorts would get some refunds on the property taxes if Disney is successful.

 

[cmwade77]

Thing is, after owning for 5-10-15 years, it often seems like one thing or another. One year the operating budget gets an abnormally high bump because DVC claims they're putting new housekeeping procedures in place. Next year gas prices rise and transportation line item balloons. Next year a hurricane hits FL and it's insurance rates. Then taxes, capital reserves..the list seems endless.

Before you know it, you're seeing total dues increases of 4-8% every single year, which is obviously faster than wages are rising.



Incorrect. There is a cap on the amount operating costs may rise in a year but there is zero cap on tax rates. Whatever the county assesses is that owners pay. Unless rates are successfully challenged.

A other advantage of owning at the Grand Californian, there are limits imposed by the state of California on how much dues can increase by each year, although I don't know the exact percentage, the limit is there.

Of course since there is no shuttle service, no magical express, etc. means there are fewer ammenities that have to get paid for as well.

California also doesn't do this yearly reassessment as far as I am aware, reassessment only happens during major remodels (basically if it requires a permit, it requires a reassessment) or during a change in ownership.

 

[wdrl]

A other advantage of owning at the Grand Californian, there are limits imposed by the state of California on how much dues can increase by each year, although I don't know the exact percentage, the limit is there.

Of course since there is no shuttle service, no magical express, etc. means there are fewer ammenities that have to get paid for as well.

California also doesn't do this yearly reassessment as far as I am aware, reassessment only happens during major remodels (basically if it requires a permit, it requires a reassessment) or during a change in ownership.

The DVC resorts located at Walt Disney World also have a limit on how much their Operating Budgets can rise from year to year. If DVC wanted to increase the Operating Budget over the set limit, it would first need to get approval from the owners. As tjkraz points out, there is no such cap on increases in ad valorem tax amounts. I don't know if the Villas at Grand Californian has a cap on yearly tax increases.

I'm not sure what was meant by "yearly reassessment" but VGC has seen increases in its annual maintenance fees. In 2018, VGC's fees increased 3.9% and they have increased 13.3% since 2014. These increases apply even if there has been no major remodels or changes in ownership.

By the way, VGC is the only DVC resort that embeds a Transient Occupancy Tax in its annual maintenance fees. In 2018, every VGC owner pays a Transient Occupancy Tax of $0.4686 per point as part of their yearly dues. This tax is paid even if the owner does not use their points to stay at VGC. Aulani also has a similar tax called a Transient Accommodations Tax, but it is only levied on actual stays and it is not included in the annual dues.

 

[bumbershoot]

Then I think about CCV and believe that property would not likely be affected by a reassessment because it should already be pretty "accurate", right? Also, it's new, so there shouldn't be a lot of "surprise maintenance" etc.

You’d think, but not if you were a bay lake owner from the beginning of bay lake.

 

[cmwade77]

The DVC resorts located at Walt Disney World also have a limit on how much their Operating Budgets can rise from year to year. If DVC wanted to increase the Operating Budget over the set limit, it would first need to get approval from the owners. As tjkraz points out, there is no such cap on increases in ad valorem tax amounts. I don't know if the Villas at Grand Californian has a cap on yearly tax increases.

I'm not sure what was meant by "yearly reassessment" but VGC has seen increases in its annual maintenance fees. In 2018, VGC's fees increased 3.9% and they have increased 13.3% since 2014. These increases apply even if there has been no major remodels or changes in ownership.

By the way, VGC is the only DVC resort that embeds a Transient Occupancy Tax in its annual maintenance fees. In 2018, every VGC owner pays a Transient Occupancy Tax of $0.4686 per point as part of their yearly dues. This tax is paid even if the owner does not use their points to stay at VGC. Aulani also has a similar tax called a Transient Accommodations Tax, but it is only levied on actual stays and it is not included in the annual dues.

I mean property values do not get reassessed every year in California like they seem to do in Florida. This affects property taxes, which then in turn would affect your yearly maintenance fees and dues. The only time California reassess the value of a property is during a change in ownership or a major remodel that requires permits. In some cases, you may also request a reassessment, such as if property values have decreased it may be in your best interest to do so.

California actually has a cap of a certain percentage (I believe it is somewhere between 3%-5%) that your maintenance fees and dues can increase by each year on a timeshare in California. Now that is a percentage increase over the previous year's dues, so it can be compounded to a degree, but Florida timeshare have no such protection and dues/maintenance can increase by any amount each year, even double or triple the previous years dues.

Now, property tax rates (percentage wise) may increase, but only if the measure is put on the ballot and passes, in most cases it will require a 3/4 majority to pass as well. We do have law makers that try to skirt around this law, such as they tried to do with the gas tax increase, but we will hold them accountable in September and at least one of the people who voted that in was recalled over it. But the cap on maintenance fees and dues increase is still there and any increases in property taxes have to be accounted for within that cap. I supposed if taxes increased enough they could work a one time exemption into the laws that increased the property tax, but again, we Californians will not accept that in most cases.

So, yes, the dues have increased a total of 13.3% since 2014, but that could have been much worse if the property was located in Florida.

That was my point, the taxes can't increase due to the property being reassessed unless something happens to force it to have to be reassessed in California.

 

[Wakey]

Come live in U.K.

I pay around 45% income tax and national insurance (health service cost) on my entire income.
Sales tax (VAT) is 20%. Although it’s not on many groceries.
Council tax (property tax) is about $5k a year for me.
Petrol (gas) currently $1.50 a litre (roughly $5.50 a gallon).

Only thing cheaper is supermarket groceries, these often seem much more expensive in US, for example a loaf of bread here is about $1.30.

Now back to DVC- is this property tax assessor a*****e going to make my dues go up? I’m scalped enough back home.

 

[cmwade77]

Pretty much, which is why Disney is fighting him on it. Disney may even be legally obligated to do so.

 

[ajjonesehc]

Looks like the judge ruled in favor of the appeal for the Yacht and Beach Club property taxes. Hopefully all of these go a similar direction.

https://www.clickorlando.com/news/c...r-yacht-and-beach-club-resorts-property-taxes

 

[Cyberc1978]

Wondering how much this will decrease our dues, assuming that Disney also wins any appeal.

 

[DenLo]

DVC hasn't had the extreme evaluation increases as the Disney Resort hotels. See post #17. https://www.disboards.com/threads/disney-challenging-property-tax-valuations.3688758/#post-59383564 So I doubt our dues will change.

 

[ajjonesehc]

DVC hasn't had the extreme evaluation increases as the Disney Resort hotels. See post #17. https://www.disboards.com/threads/disney-challenging-property-tax-valuations.3688758/#post-59383564 So I doubt our dues will change.

Agreed. Additionally, property taxes are a relatively small amount of your annual dues when compared to the overall operating budget of the properties. If there is any reduction or adjustment it will be small.

 

[supersnoop]

Agreed. Additionally, property taxes are a relatively small amount of your annual dues when compared to the overall operating budget of the properties. If there is any reduction or adjustment it will be small.

At BLT, the property taxes are 28.5% of the dues. I wouldn’t consider that a “relatively small amount.”

 

[ajjonesehc]

At BLT, the property taxes are 28.5% of the dues. I wouldn’t consider that a “relatively small amount.”

The property taxes at the WDW DVC resorts do constitute approximately 25% of the total cost of the dues. That is relatively small compared to the rest (operating plus reserves budget). When you assume that the any reduction or adjustment to the dues to account for overcharged property taxes will likely be small, a small portion of one of the smallest line items in your dues won't have that much of an effect on your overall dues liability.

 

[bluecruiser]

The property taxes at the WDW DVC resorts do constitute approximately 25% of the total cost of the dues. That is relatively small compared to the rest (operating plus reserves budget). When you assume that the any reduction or adjustment to the dues to account for overcharged property taxes will likely be small, a small portion of one of the smallest line items in your dues won't have that much of an effect on your overall dues liability.

According to the article, the property valuation was cut by 44% ($188 million instead of $336 million). If they cut the valuation of the property by 44%, doesn't that mean a 44% reduction in property taxes? If anyone considers 11% of their dues as insignificant, I'd be happy to take the savings off their hands.

 

[CarolMN]

The decision will be appealed. We're unlikely to see any benefit for a long time.

 

[ajjonesehc]

The decision will be appealed. We're unlikely to see any benefit for a long time.

Agreed!

 

[wdrl]

Wondering how much this will decrease our dues, assuming that Disney also wins any appeal.

The lawsuit that was decided on July 3, 2018, by the Court did not include any DVC resort properties. It only covered the Yacht & Beach Club Resorts, which was identified in part by its property appraisal parcel number. I'm not sure if the Beach Club Villas was included in the lawsuit because it has a different property appraisal parcel number than that of the Yacht & Beach Club.

I've looked at a handful of the pending court cases and I note that the property appraisal parcel numbers cited in the proceedings never seem to include the DVC parcel numbers, which are different from the main resorts. I have found cases for Wilderness, Animal Kingdom, Polynesian, and others, but they seem to limit the scope of the lawsuits to the main resorts. I'm probably just missing the obvious.