Timeshare ownership gives you the right to use a vacation property for a set period each year, in exchange for an upfront purchase price and recurring fees that continue for as long as you hold the interest. What you actually own, how you book your time, what you pay annually, and how you eventually get out all depend on the structure of your contract. New timeshare interests averaged roughly $23,000 in 2024, with annual maintenance fees averaging close to $1,500 and rising about 33 percent over the previous five years.
What You Actually Own
The legal structure of the contract decides nearly everything else: whether you can sell the interest, leave it to heirs, finance it, or walk away when the term ends. Two structures dominate the industry.
Deeded (Fee Simple) Interests
A deeded timeshare is a fractional ownership stake in real property, recorded with the county the same way a house or condo would be. You receive a deed, and the interest exists in perpetuity unless you sell it, give it away, or lose it to foreclosure. Because it is real property, you can sell on the secondary market, leave it to heirs in your will, or use it as collateral. The deed ties to a specific unit or to the resort’s common elements and carries the recorded-real-estate protections of the state where the resort sits.
Right-to-Use (Leasehold) Interests
A right-to-use contract conveys no real property. You receive a contractual license to use the resort for a set number of years, typically between 20 and 99. When the term expires, all rights revert to the developer. These interests are personal property, not real estate, which limits your ability to finance, transfer, or bequeath them. The contract itself spells out what you can and cannot do, and developers often retain tighter control over resales than they do with deeded units.
How You Book Your Time
Three scheduling models appear across the industry, and some resorts blend them.
- Fixed week. You own the right to the same unit during the same calendar week every year. Predictable, easy to plan around, and locked to one set of dates.
- Floating week. You can request any available week within a broader season defined in your contract. Popular dates go fast, and priority is typically first-come, first-served, though some resorts give longer-tenured owners an edge.
- Points-based. You receive an annual allocation of points that function as a vacation currency. A peak-season week in a large suite costs more points than an off-season studio. Unused points generally expire at the end of the use year, though some programs allow limited banking or borrowing.
Many resorts now use conversion tables that translate week-based ownership into point values, giving fixed- and floating-week owners access to the same booking platforms as points owners. Your specific allocation, expiration rules, and booking windows all come from the purchase contract.
Exchange networks like RCI and Interval International let you trade your home-resort week or points for a stay at a different resort. Membership and exchange fees are separate from your resort maintenance fees and are paid directly to the exchange company. Availability depends on what other members have deposited, so popular destinations during peak season can be hard to secure.
What It Costs Each Year
The purchase price is the starting point. Ongoing costs accumulate every year you own the interest, and most of them are not optional.
Maintenance Fees
You owe annual maintenance fees to the resort’s homeowners’ association. These covered day-to-day operations in 2024 at an average of about $1,500: staffing, housekeeping, landscaping, insurance, and routine repairs. The association sets the amount each year through its budget process, and you are contractually bound to pay whether or not you use the unit.
Special Assessments
When a major expense exceeds the regular budget, the association can levy a special assessment. These one-time charges cover items like roof replacements, storm damage, or infrastructure upgrades, and they can reach several thousand dollars per owner. The assessment is owed regardless of whether you use the facilities the money pays for, and the collection mechanisms match those for regular fees.
Property Taxes
Deeded interests carry property taxes. The resort typically collects these from owners and remits them to local taxing authorities, so you may not receive a separate tax bill. Right-to-use contracts generally do not trigger a direct property tax obligation for the individual owner, since you don’t hold title to real property.
What Happens If You Stop Paying
The resort’s governing documents almost always give the association a lien right against your interest when fees go unpaid. The lien covers missed payments plus interest, penalties, and attorney fees. If the debt stays unresolved, the association can foreclose on your interest even if you have no remaining mortgage balance. A foreclosure wipes out your ownership and can damage your credit, and in some states the association can pursue a deficiency judgment for the remaining balance.
Taxes on Renting or Selling
Two federal tax rules catch owners off guard.
Renting Out Your Week
If you rent your timeshare for fewer than 15 days in a year, you don’t have to report the rental income, and you can’t deduct rental expenses. The IRS treats the unit as a personal residence for that year.1Internal Revenue Service. Publication 527, Residential Rental Property If you rent it for 15 days or more, all the rental income is taxable, and you must split your expenses between personal use and rental use. The amount you can deduct depends on the ratio of rental days to total use days, and your personal use cannot exceed the greater of 14 days or 10 percent of the rental days if you want to treat the property as a true rental rather than a personal residence.2Office of the Law Revision Counsel. 26 USC 280A – Disallowance of Certain Expenses in Connection With Business Use of Home, Rental of Vacation Homes, Etc.
One wrinkle hits timeshares specifically: personal use by any co-owner counts as personal use by all owners. That makes it extremely difficult to meet the personal-use limits when your unit is part of a shared ownership plan.3Internal Revenue Service. Personal Use of Business Property (Condo, Timeshare, etc.)
Selling at a Loss
Most timeshares lose significant value on the secondary market. If you sell a personal-use timeshare for less than you paid, the loss is not deductible. Federal law limits individual loss deductions to losses from a trade or business, transactions entered into for profit, and certain casualty or theft events. A vacation property you used personally does not fit any of those categories.4Office of the Law Revision Counsel. 26 USC 165 – Losses You absorb the full loss with no tax benefit. If you sell at a gain, the profit is taxable as a capital gain.
Your Right to Cancel After Purchase
Every state gives timeshare buyers a short window to cancel the purchase with no penalty. This rescission period typically lasts between 3 and 15 days after you sign the contract, depending on the state where the resort is located. The right is generally nonwaivable, meaning the developer cannot pressure you into giving it up, and the contract itself must disclose the right and the deadline.
To cancel, you must deliver written notice to the developer within the rescission window. Some states require certified or registered mail; others allow hand delivery. The details sit in the contract paperwork, so read the cancellation clause before you leave the sales presentation. Missing the deadline by even a day can lock you into a decades-long obligation. This is the single easiest off-ramp you will have. Once the rescission period closes, getting out of a timeshare becomes dramatically more expensive and complicated.
Selling, Transferring, or Giving It Away
Timeshares are notoriously difficult to resell. The secondary market is flooded with inventory, and most units sell for a fraction of the original price. Some owners list for $1 and still can’t find a buyer. That gap between purchase price and resale value shapes both the mechanics of transfer and the scam landscape around it.
How a Deeded Transfer Works
A deeded transfer resembles a simplified real estate closing. It starts with a title search to confirm the interest is free of liens or unpaid assessments. A new deed is drafted, signed, notarized, and recorded with the county recorder’s office where the resort is located. Some states also charge a real estate transfer tax on the sale. The resort’s governing documents may require written approval from the management company before the transfer goes through, and many charge an administrative transfer fee of several hundred dollars.
How a Right-to-Use Transfer Works
Right-to-use contracts don’t involve a public land record. The developer updates its internal registry to reflect the new owner. Developers typically charge a transfer fee and may impose conditions, such as verifying the new owner’s financial qualifications or requiring that all maintenance fees are current.
Right of First Refusal
Many timeshare contracts include a right-of-first-refusal clause giving the developer the option to buy the interest under the same terms you’ve negotiated with your buyer. The review period generally lasts two to four weeks. If the developer exercises the right, it steps in as the buyer at your agreed price. If it waives, the sale proceeds. Developers use this mechanism to control resale prices and keep their inventory from being undercut. The delay can frustrate buyers, and some walk away during the waiting period, forcing you to start over.
Finishing the Transfer
Once the deed is recorded or the developer’s registry is updated, the original owner should give formal written notice to the resort to stop future billing. Skipping this step is a common mistake that leaves maintenance fees landing in the former owner’s lap.
Resale and Exit Scams
The Federal Trade Commission warns that anyone guaranteeing a quick sale or big returns on a timeshare resale is almost certainly running a scam.5Federal Trade Commission. Timeshares, Vacation Clubs, and Related Scams Red flags include claims that the company has buyers ready to purchase, promises that the market is hot, and demands for upfront fees before any services are performed. Legitimate resale brokers typically take their commission after the sale closes.6Federal Trade Commission. Timeshare Resale and Rental Scams
A related category of fraud targets owners who want out. Exit companies reach out with unsolicited calls, guarantee they can cancel your contract, and demand large upfront payments. Some do nothing after collecting the fee. Others simply contact the resort on your behalf, which is something you could do for free. The FTC recommends contacting your resort’s management company directly to ask about exit options before paying any third party. If you do engage an outside company, verify that its agents are licensed to sell real estate in your state, check for complaints with your state attorney general, and get every promise in writing.
Passing a Timeshare to Heirs
A deeded timeshare passes through your estate like any other real property. If your will names a beneficiary, they inherit the interest along with its ongoing maintenance fee obligation. If you die without a will, the interest passes under your state’s intestacy laws. Either way, the heir receives both the asset and its costs.
Heirs who don’t want the timeshare can file a qualified disclaimer under federal law. The disclaimer must be in writing, delivered within nine months of the owner’s death, and the heir must not have accepted any benefit from the interest, such as using the unit or collecting rental income, before disclaiming.7Office of the Law Revision Counsel. 26 USC 2518 – Disclaimers A valid disclaimer sends the interest to the next person in line under the estate plan or state law. If no one claims it, the executor may need to manage or liquidate it, and the estate remains responsible for fees in the meantime.
Placing a deeded timeshare into a revocable living trust can help beneficiaries avoid probate, but the trust also assumes all ongoing obligations. Before purchasing, it’s worth checking the resort’s rules around trust ownership and transfer-on-death provisions. Some resorts make the process straightforward; others impose fees or restrictions that complicate estate planning.
Who Sets Your Fees
Every timeshare resort operates under a homeowners’ association structured as a nonprofit corporation with a board of directors.8Internal Revenue Service. IRC Section 501(c)(4) Homeowners Associations The board sets the annual budget, determines maintenance fee amounts, and decides on long-term capital projects. A professional management company usually handles day-to-day operations under contract with the association.
Owners vote for board members and on major changes to the bylaws. Participation rates tend to be low, because owners are geographically scattered and may not view the resort as a priority between vacations. Low turnout can let a small group of engaged owners, or the management company itself, drive policy. If you care about how your fees are spent, showing up to vote is the lever you have.