A timeshare is a major investment and one you need to think about carefully. While it will guarantee you holiday time in a prime location of your choice, it will have an impact on the way you file your taxes. Read on to see a few of the things you need to know before you purchase a New York City timeshare.

Consider Special Assessment Fees

The very first thing you need to do is to find out any additional fees you may have to pay. The homeowners association to which your timeshare belongs will be the best place to find out these details. Apart from regular maintenance fees, you may also end up having to pay special assessment fees, which are charged if your resort home has expenses that are out of the ordinary. These include major renovations or damage from extreme weather events, and they might leave you with higher expenses than you had planned for. These expenses, like maintenance fees, are rarely tax-deductible. With the average price of a new timeshare standing at $20,040, it's important to have a good idea of how much your expenses will add up to so you can stay prepared.

Property Taxes on Timeshares

The property taxes for your timeshare will depend on the state where your timeshare is located, in this case, New York City. The property tax payable for your timeshare will be similar to the tax you need to pay for your primary home. Each timeshare management company functions a bit differently, and so some bundle the property taxes in with your maintenance fees while others bill them separately.

If you make improvements on the timeshare resort, this will raise its value, which will consequently increase the taxes you have to pay for it. You can get exempted from this if your timeshare contract has a guaranteed fee, which is not included in all timeshare contracts. If you fill out forms online, you may be required to have a Personal Identification Number or a PIN. This is a five-digit number that can act as a digital signature while you're filing tax forms online.

Know Exactly What You're Buying

In order to gain a competitive edge over other timeshare sellers, some companies will often offer incentives and perks to inspire you to buy from them. It's important to look beyond these perks to make sure you're getting the best deal you possibly can, and you're not paying more than you need. Most timeshares on sale will also come with a deed for the property, which you can hold in perpetuity as long as you pay the maintenance fees associated with it.

Find out if the timeshare you want to buy offers one of these, as they can enable you to rent your timeshare out, sell it, or exchange it for another property. Knowing these details will make it possible for you to plan your estate. There are three parts of an estate plan, they are a last will and testament, general power of attorney, and health care power of attorney.

Knowing these details will enable you to make the right decision for your timeshare. Make sure to read the contract thoroughly, seeking clarification about anything that's unclear to you. For instance, find out whether the timeshare you want can be exchanged or traded in at times when you're unable to use it. When you know this, you will be better able to plan your vacations and in the end, get the most out of your timeshare, making the best use of your investment.