Buying holiday time
Timeshares are a form of ownership or right to use a particular
property 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
Here are some tips on what to look out for when buying and
How timeshares work
There are two types of timeshare programs.
- Programs that give you the use of a specific property for a
given time period such as one week.
- Points-based programs that let you buy points that you can
redeem at certain resorts or holiday accommodation in various
Timeshare programs are also known as 'vacation ownership' or
'timeshare intervals' and can vary in price. Most people buy
1 to 2 weeks per year, but can buy more.
With points-based programs, the number of days you can use will
depend on how many points you have. Some points-based timeshares
let you redeem points for other travel services.
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
Swapping or banking time
You can use an exchange company to trade your holiday week for a
week in another local or international resort.
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 investment known as a managed fund. Generally this means
that the scheme operator must hold an Australian financial services
(AFS) licence 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 your investment holds an AFS
You will be required to pay an annual maintenance fee toward the
upkeep of the property. You may also have to pay a membership fee
Borrowing money to buy timeshares
Banks don't generally lend money to buy into timeshare programs.
However you may be offered credit by a timeshare operator or a
credit provider associated with the timeshare operator.
If you plan to borrow money for a timeshare, check the credit
provider is licensed by searching ASIC Connect's Professional Registers.
Make sure you understand all the terms of the credit contract before you sign
If you're thinking about 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
The product disclosure statement and application form that
the timeshare 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
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 on timeshares, 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 were
able to go back to the timeshare operator and cancel 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 profit - There are often a lot
of timeshares available for sale, so you may not get as high
a price as you'd like.
- 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
return, consider other options. Timeshares are a long-term
lifestyle choice, so make sure you think carefully before signing
Last updated: 01 Aug 2016