# USVI timeshares and individual property taxes



## Tia (Mar 28, 2009)

The USVI government is trying to increase timeshare property taxes on ts weeks individual units for 2006  (ya they are that far behind  ) .  

Anyone here own at one of the below?  Do you know if your association pays the taxes or do you get a bill directly from the USVI gov for your week? 

There is a group looking into trying to do something. The individual resorts probably don't care if they aren't responsible for the individual weeks tax bill :annoyed: .  They are trying to nearly triple the tax bill for one of our ts weeks!


Ritz-Carlton Club

Club St. Croix

Divi Carina Bay Resort

Hotel on the Cay

Chenay Bay Beach Resort

Carambola Beach Resort

Club Villa Azul

Elysian Beach Resort

Magens Bay Villa Club at Magen

Paradise Found Vacation Club at Sapphire Beach

Sunset Ridge Villas
Tropic Leisure Club at Magens Point Resort

The Bay Club

Virgin Grand Villas

Westin St. John Resort and Villas

Marriott's Frenchman Cove

Flagship Club at Sapphire Beach Resort and Marina


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## DavidnRobin (Mar 29, 2009)

I have written about the WSJ (Westin St John) Tax situation on the WSJ thread (long) in the Starwood Forum. 

Taxes are paid by the Owner outside of the MFs. They have not been billed since 2005 - so 2006 - 2009 will be owed at some point.  A court fight is holding them up.  They will likely increase by 2-3X when they do get billed - unless a group representing TS Owner/Resorts fights back.  TS Owners will get the worst of it (taxation w/o representation).

Ours (2Bd TH)  is increasing from ~$130 to ~$280/week owned - when they do get billed.  I know this because they attempted to send bills out at one point - by the court intervened.  This is often discussed in the local Virgin Island Paper.
http://www.virginislandsdailynews.com/


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## Tia (Mar 30, 2009)

DavidnRobin  Thankyou for replying, this is great. Will look in the Starwood forum for your post.

 Do you know your HOA board representatives? As possibly they could get the word out to all owners at in your HOA and connect with our group via email if there is interest. 

Marriott Frenchman owners should also beware as even though the situation is on hold now they are trying to tax you at original developer purchase price and our value is $17,900 for week 8 and the 2006 tax they want now is up to $279~ from $110~ prior!! EVEN IF YOU BOUGHT RESALE they are using old data from the developer sales.

What is a "2Bd TH" at the Westin?


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## Tia (May 1, 2009)

*Update!*

Even thought the Marriott board has had more talk on this topic thought I'd post this here---


Litigation will have been commenced both in the Superior Court of the Virgin Islands and the United States District Court on St. Thomas regarding the payment of real property taxes by timeshare owners in the United States Virgin Islands.  

What are some of the issues to be raised in the lawsuit on behalf of timeshare owners?  There are many issues that can and will be advanced in the suit. Let's just provide a few examples raised by Pirates’ Pension Board President Ira L. Frank in appealing his own assessments to the Board of Tax Review.

For openers, the law requires the property to be assessed on its "actual value."  This was not done. There is no evidence that the Government inspected the timeshare units in evaluating their value as required by law. 

The Government may not increase the valuation and assessment of noncommercial property more than 10% over the previous valuation and assessment.  In one particular year, President Frank’s Hilltop Villas unit’s valuation and assessment was raised by over 285%.

Valuations of the weeks for the same unit vary greatly week by week with no justification.  Similar units on the same horizontal level also vary greatly in valuation without justification.  In the case of his toxic mold-infested first floor studio unit in Hilltops Villas II, if the other units were valued as his, the total value of the studio would be $754,520.  If one averaged all the assessments, the studio would be valued at $400,000.  If the lowest valuation was used and multiplied by 52 weeks, the studio would be valued at approximately a quarter million dollars.  This is nonsense and the Government only can get away with this if owners permit themselves the luxury of taking no action. 

There is nothing in the law that permits the Government to subdivide condominium units used for timeshares into 52 separate entities and assess each week at a different rate.  We insist the unit should be valued appropriately and taxed accordingly.  That tax should be divided into 52 equal portions.

The Virgin Island legislature passed a statute in 2008 which provided for a separate mill rate for timeshare owners and a lower rate for other residential property. This is probably illegal for singling out timeshare owners as a separate class of part-year residents.  The higher mill rate has been retroactively applied by the Virgin Islands Government to the 2006 real property bills.  

Other matter of concern include that the statute requires appeals to be heard within sixty days of filing. The Board of Tax Review has exceeded that amount of time by years in the case of President Frank’s appeals. When a hearing was finally scheduled, the notice sent by the Board of Tax Review did not state that the appellant can appear by counsel. Instead, it said if you don't appear the case will be thrown out.  This is very disadvantageous to timeshare owners who do not reside year round on the Virgin Islands.   The Board lowered the assessment approximately in half but gave no rationale for their decision.  Should it have been even more? Their decision appears to be arbitrary, whimsical and capricious.

The statute states that an appeal from the Board of Tax Appeals must be filed in Superior Court.  However, counsel still believes he can get it heard in U.S. District Court based on certain legal theories.  He prefers Federal court but will file in both.

Joseph A. DiRuzzo, III, an attorney on St. Thomas has been selected to litigate the issues.  He is both an attorney and certified public accountant.  Mr. DiRuzzo is an associate in the law office of Marjorie Rawls Roberts. 

Mr. DiRuzzo plans to pursue this case as a class action. Those who wish to participate will be able to do so at no charge.  Those who wish to "opt out" may make that election.  However, if an individual opts out, they will not be covered by any judgment or settlement.  If they wish to pursue their legal rights they would be free to do that at their own expense.  But if the Court does not certify the Virgin Islands timeshare owners as a class, the case will be handled on a contingency fee basis.

The Plaintiffs would be required to pay the initial court filing fees along with the service of process. This can cost several hundred dollars.  Later, the biggest expense would be any depositions needing to be taken. Mr. DiRuzzo would be willing to return out of pocket expenses should we win the case or settle if handled on a contingency fee basis.

It is really difficult to answer a common question regarding how long it will take this matter to be resolved.   To a large degree it depends upon how strong a fight the defendant chooses to wage.  But, it can also be to the advantage of the Government to settle quickly particularly if injunctive relief is sought to prevent the Government from moving forward on taxing timeshare owners. 

In terms of financial benefit, we would be seeking cash for the damages to timeshare owners. We expect to allege fraud and seek punitive damages. The Government may seek to give a credit towards future taxes.  But equally if not more important than the cash payment or tax credit is that the system will no longer discriminate against timeshare owners. There is a lot of money at stake in the case.  At last count there were 22 timeshare associations on the Virgin Islands. The Government is not expecting owners organized to fight.


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## Tia (May 1, 2009)

The docket number is 3:09-cv-00066. It can be obtained from the the PACER system for the United States District Court for the Virgin Islands.


If you know the name of your Board President and their
contact phone numbers / emails from the various timeshare resorts in the USVI the attorney is hoping to notify all of them. They should at least be made aware of the lawsuit. Their attorneys might wish to monitor the case.


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