Buying holiday time
Timeshares are a form of ownership or right to use a particular
property or properties, such as a holiday villa, apartment or
cabin for a set period of time. You can buy timeshares in Australia
or overseas but be aware they are a long term commitment and can be
difficult to sell.
High pressure sales techniques can sometimes be used by
promoters to get you to sign up on the spot. Here are some tips on
what to look out for when buying and selling timeshares.
How timeshares work
There are two types of timeshare schemes.
- Specific time period schemes - These give you
the use of a specific property for a given time period such as one
week a year.
- Points-based schemes - Where you buy points
(or credits) that you can redeem at a number
of resorts or holiday accommodation properties in various
Timeshare schemes, also known as 'vacation or holiday clubs' or
'timeshare intervals', vary in price depending on the amount of
time or points purchased and other factors such as the location and
standard of available accommodation.
With points-based schemes, the number of days you can redeem
each year will depend on how many points you have, the time of
the year you use them and the location and type of accommodation.
Some points-based timeshares let you redeem points for other travel
It may cost you more to buy time or use points in peak periods
such as school holidays or around public holidays. Most timeshares
have a calendar, suggesting the best times to buy, and any special
2019 ASIC report on timeshares showed many consumers felt that
they were not getting the expected value from their membership.
Consumers had experienced financial stress because of unexpected
changes to timeshare membership fees, or in some cases, to their
Swapping or banking time
If you buy a timeshare but don't plan to use the property within
the specified period, you may be able to rent your timeshare to
others. You can also 'swap' or 'bank' your timeshare through
Timeshare schemes are a type of managed
fund. Generally this means that the scheme operator must
hold an Australian financial services (AFS) licence, register the
scheme with ASIC and must give you a product disclosure
Before you buy into a timeshare program or scheme,
check ASIC Connect's Professional Registers to
find out if the company managing the timeshare holds an
You will be required to pay a maintenance fee (usually
annually) toward the upkeep of the property even if you don't
use the property. You may also have to pay a membership fee each
You need to pay these fees for the whole time you have a
timeshare so check how long this is, it may be a very long time. If
you don't keep up with your payments, your timeshare might be
forfeited and you may receive no money back.
Borrowing money to buy timeshares
Banks don't generally lend money to buy into timeshare schemes.
However you may be offered credit by a scheme operator or a
credit provider associated with the scheme operator.
If you do plan to borrow money, check the credit provider
is licensed by searching ASIC Connect's Professional Registers.
Make sure you understand all the terms of the credit contract, including the
financing repayments, and the cooling-off period, before you
Ultiqa Lifestyle timeshare loan refunds
Future Holiday Finance will refund up to $3 million because ASIC
found that they signed people up to loans when they attended Ultiqa
Lifestyle timeshare sales seminars, without first assessing if they
could afford the loans or if the loans were right for them. Find
out if you can get a refund of your
Ultiqa Lifestyle timeshare loan
If you're going to a timeshare seminar remember:
- You don't have to sign on the dotted line on the day
- You have the right to a 7-day cooling-off period after you
sign. The cooling-off period is 14 days if the operator is not a
member of the Australian Timeshare and Holiday Ownership Council
- You should carefully read the product disclosure statement you
are given and understand the terms and costs before signing up
The product disclosure statement and application form that
the scheme operator gives you should tell you the cooling-off
period that applies. You will be asked to sign an acknowledgement
that you have received the cooling-off statement.
If you don't want to go ahead with the purchase, make sure you
tell the company in writing before the end of the cooling-off
Take the time to consider the up front and ongoing costs of the
timeshare and compare these costs against alternative holiday
arrangements. Timeshares usually only cover the accommodation
portion of your holiday which is not a fair comparison to the total
cost of a typical holiday that also includes travel, food,
entertainment and other incidental costs.
See avoiding sales
pressure for tips on how to deal with salespeople.
Case study: Jane and Riley change their minds about a
Jane and Riley received a phone call from a timeshare operator
offering them a free family holiday. They were told that all they
needed to do was go to a short presentation with no obligation to
buy. They attended the 4-hour presentation and decided to sign up
for the timeshare program.
A few days later, Jane and Riley looked at the figures again.
They realised that for a one-week holiday each year, they'd be
paying an initial amount of $22,000; and on top of that they'd have
to pay $500 a year in maintenance fees as well as a $100 yearly
They worked out that over 10 years it would cost them $28,000,
which was more than they had intended to spend on holidays in that
time. As they were still within the cooling-off period,
they emailed the timeshare operator and cancelled the
Selling your timeshare may not be as easy as you
think. Here are some things to consider before putting your
timeshare up for sale:
- Don't expect a buyer or a profit - There
are often a lot of timeshares available for sale and there may not
be a lot of interested buyers, so you may not get as high
a price as you'd like or be able to sell your timeshare at
- Be creative in how you market it -
Developers who sell timeshares spend lots of money on advertising,
so you may need to think of innovative ways to compete with their
- Get the price right - Check how much
timeshares are selling for at the time you put yours on the market,
so you know what a reasonable sale price is.
Dealing with problems
Timeshare operators must be members of an external dispute resolution scheme. If
you have a dispute that involves a timeshare operator, see how to
Timeshares best suit people who want to make a
long-term commitment to the accommodation provided by the timeshare
operator. If you are looking for an investment that will give you a
financial return, consider other options. Timeshares are a
long-term lifestyle choice, so make sure you think carefully before
Last updated: 09 Dec 2019