Laws, Regulations & Annotations

Property Taxes Law Guide – Revision 2014
 

Revenue and Taxation Code

Property Taxation

Part 2. Assessment

Chapter 5. Special Types of Property

Article 1. Generally

Section 998

998. Timeshare estate, timeshare use, and timeshare interest. (a) The full value of a time-share estate or a time-share use subject to tax under this division shall be determined by finding the real property value of the interest involved and shall not include the value of any nonreal property items, including, but not limited to, vacation exchange rights, vacation conveniences and services, and club memberships. Accordingly, the full value of a time-share estate or time-share use may be determined by reference to resort properties, condominiums, cooperatives, or other properties which are similar in size, type, and location to the property subject to time-share ownership and are not owned on a time-share basis. The aggregate assessed value of all the time-share estates or uses relating to a single lot, parcel, unit, or other segment of real property shall be determined by adding (1) the fair market value of the similar lot, parcel, unit, or other segment not owned on a time-share basis, and (2) an amount necessary to reflect any increase or decrease to the market value attributable to the fact that the property is marketed in increments of time, or by any alternate method which will determine the real property value without regard to any nonreal property items which may be included.

(b) Nothing in this section shall authorize a reassessment of real property as a result of the creation or transfer of a time-share interest in the property unless the creation or transfer of the time-share interest constitutes a change in ownership under Chapter 2 (commencing with Section 60) of Part 2 and Section 2 of Article XIII A of the California Constitution.

(c) For purposes of this section, "time-share estate" and "time-share use" shall have the meanings set forth paragraph (x) in Section 11212 of the Business and Professions Code, and "time-share interest" shall refer to both time-share estates and time-share uses.

(d) Nothing in this section may be construed as requiring the assessment of any property at less than fair market value as required by Section 401.

History.—Added by Stats. 1983, Ch. 1110, in effect January 1, 1984. Stats. 1991, Ch. 646, in effect January 1, 1992, deleted subdivision (e) which provided "The State Board of Equalization shall adopt by June 30, 1984, regulations to carry out the provisions of this section.". Stats. 2003, Ch. 62 (SB 600), in effect January 1, 2004, substituted "may" for "shall" after "in this section" in the first sentence of subdivision (d) and substituted "time-share" for "time share" throughout the text. Stats. 2004, Ch. 697 (AB 2252), in effect January 1, 2005, substituted "paragraph (x) of Section 11212" for "Section 11003.5" after "set forth in" in the first sentence of subdivision (c).

Note.—Section 1 of Stats. 1983, Ch. 1110, provided that the Legislature finds that the development and sale of timeshare interests is an important and growing segment of the real estate industry in California and that certainty and uniformity in the assessment of such interests is important to the continued development of timeshare projects in this state.

The Legislature also finds that a significant portion of the purchase price of a timeshare interest may be attributable to features and services that are not real property, in addition to the ownership of real property. These nonreal property items may include vacation exchange rights, vacation conveniences and services, club memberships, and other intangible rights and services which are not real property and are not subject to assessment for property tax purposes.

It is, therefore, the intent of the Legislature in enacting this act to provide uniformity and certainty in the assessment of timeshares by providing a method for valuing timeshare interests which identifies only that portion of the interest constituting real property subject to property tax in accordance with Article XIII and Section 1 of Article XIII A of the California Constitution. Sec. 3 thereof provided that the Legislature finds and declares that Section 2 of this act is declaratory of, and not a change in existing law. It is the intent of the Legislature in enacting this act to clarify the application of existing law and provide uniformity and certainty in the assessment of timeshare estates and uses. Sec. 4 thereof provided that no appropriation is made by this act and the state shall not reimburse any local agency for any property tax revenues lost by it under this act, since this act is declaratory of existing law.