Just discovered a hidden snag ....

[Sue's Mum]

We were briefly thinking of selling our WL points and buying SSR until ..... I read about FIRPTA tax. This is a 10% tax payable to the US Inland Revenue on the whole of the sale price.

What is so galling is that we'd be paying 10% on money that we had put into the US in the first place! How mad is that?

 

[Miffy2003]

I can attest to that. We lost 20% when we sold our SSR points (10% to the Timeshare store for handling the sale, which is perfectly fine by me) and a further 10%to the US tax man.

I was annoyed briefly at the time but then decided it was just one of those things!

I would have thought you would usually be able to switch your VWL ressies to SSR at 7 months though, due to the size of it (but you probably know that anyway and are going to tell me now you want the Grand Villas )

 

[Disney MAINEiac]

Man don't get me started on the US tax code

 

[TinkTatoo]

I'd keep the VWL points as you'll always be able to get into SSR at 7 months - if not SSR then OKW. If you're worried about booking at 7 months then book at your home resort at 11 months and swap to SSR at 7 months. That way you'd be guaranteed somewhere to stay.

 

[wen-tom]

We also thought about selling SSR points to buy into AKV but came across the same hiccup!
AS the AKV aren't finished yet there's no way to know how easy it will be to get into at 7 months. i guess i'll just have to keep my fingers crossed!

what is annoying is that we bought into SSR just before AKV was announced. we were staying at AKL when we went for the DVC tour and stressed how much we loved the resort to our guide and he didn't say anything about AKV!
I know some of you might say that he didn't know but i dont really believe that as it was announced just after we completed on SSR!

 

[Hilary]

It's a very interesting point, and one I certainly wouldn't have been aware of without reading this thread! We also (briefly) discussed selling our VWL to buy SSR points, but it was the difference in exchange rates between our original VWL purchase and now that made it unviable for us - and that was without factoring in another 10% for tax! The resale value of our VWL points is more than we paid for them in $$$s, but quite a lot less in £££s

what is annoying is that we bought into SSR just before AKV was announced.

This is what, for me, kills the "but where you want to stay" argument. However dilligently you may try to follow that rule, none of us knows what new resorts may be built in the future!

 

[jjpenguin]

I wouldn't sweat it too much. I'm sure the dues for AKL will be a lot higher than for SSR and if you are flexible and plan at the 7 month window you should be able to get AKV (though not at peak times)

 

[Revtel]

This is news to me also.

I emailed the Timeshare Store to ask for more details, and they replied as follows:-

As a Non-US citizen, you will also be assessed a 10% FIRPTA (Foreign investment withholding tax) on the selling price at the time of closing. The FIRPTA began in October 2004 as a way for the U.S. government to regulate and control foreign real estate investment. Many Non U.S. sellers are able to file a form to the U.S. government to retrieve all or a portion of the FIRPTA withholding.

Don't know how accurate the last sentence is though. Anyone got any expertise in this stuff?