- Timeshares can look appealing, offering access to holiday accommodation and a degree of cost certainty, but they’re a long-term commitment that won’t suit everyone.
- Buy-in costs, ongoing maintenance fees, service charges and booking restrictions often apply, and in many cases can make a timeshare less practical and more expensive than simply booking accommodation as you need it.
- Because timeshares can be difficult to sell and may last for decades, they can become a poor fit if your personal or financial circumstances change.
- Anyone considering a timeshare should take the time to properly assess their needs, travel habits, and finances to ensure they’re getting genuine value from the arrangement.
As the name suggests, a timeshare is a type of agreement that sees a person paying for a property and sharing time spent at it. While common overseas, timeshares are somewhat rarer in Australia, typically operating in tourism resorts and holiday hotspots.
These deals can seem extraordinary, particularly as they're often sold in a high-pressure environment, but they don't financially stack up for many Australian holiday makers.
What is a timeshare agreement?
Timeshare agreements can offer fixed or floating weeks at a resort or holiday unit. More flexible options are commonly based on points, which after accruing can be used to book holidays at different resorts or locations.
While there are several broad options available to someone considering a timeshare, each agreement is notably different, so it’s important that you consider your choices carefully and pick the option that works best for you.
Savings.com.au's two cents
Purchasing a timeshare shouldn't be a decision made lightly. Most timeshares have lengthy lifespans and they're generally far easier to buy than to sell. Also, timeshares can cost the same or more than simply booking an equivalent stay as a regular punter, and can demand hefty on-going fees. Make sure you crunch the numbers carefully before committing.
Companies selling timeshares often entice people with 'rewards' for attending seminars, then rely on high-pressure sales tactics once you’re there. Always read the Product Disclosure Statement (PDS) carefully before signing anything.
If you’ve recently purchased a timeshare, Australian law provides a seven- or 14-day cooling-off period. Your PDS will outline how to exit the arrangement within this timeframe.
What is a points-based timeshare?
A popular - perhaps the most popular - form of timeshare is the points-based timeshare. Several resorts and hotel chains offer different kinds of points-based timeshares. Some use a pure-points membership system, meaning you buy a specific amount of points that can be used to book at any of the resort's locations, while others offer the option for owners to convert a 'fixed week' into points to give more flexibility.
Timeshare owners typically receive an allocation of points each year. The number of points you need to book accommodation will vary depending on the season, how long you stay, and the type of accommodation you book.
What is a fixed week timeshare?
Some properties see a year divided into one- or two-week periods that are split between all part-owners. This process essentially buys you the right to holiday for one to two designated weeks each year at a specific holiday unit or resort.
There are perks to this kind of contract, like not having to plan ahead to make holiday reservations. You'll also have a guaranteed holiday time every year, making long-term planning simpler.
You might also be able to 'rent' your timeshare out, potentially even making a profit, if you're granted a ‘valuable’ week during a popular holiday or high season.
What is a floating week timeshare?
A floating week timeshare offers a bit more flexibility. These agreements allow owners to reserve any week throughout the year, typically on a first-come, first-serve basis.
However, some floating weeks are still restricted, often by season or a specific span of time during the year.
Costs associated with a timeshare
There are few costs associated with the process of buying into and owning a timeshare - and some of them can prove burdensome.
- Buy-in costs: Usually $20,000 - $40,000
If you’re joining a points-based timeshare, the initial buy in usually requires a minimum number of points be purchased for a given cost-per-point. In Australia, this can set a buyer back $20,000 to $40,000. Some clubs also charge a once-off joining fee. - Maintenance fees: Usually around $600 per annum
Timeshare ownership also usually means maintenance fees, covering the upkeep of the property and the administration. Maintenance fees may also be called annual levies, annual fees, or club fees. These usually average around $600 per annum. However, this may cost more or less depending on the type of property or properties you own or how many points you own. - Housekeeping or service fees when staying
Owners or members may also be required to pay housekeeping fees by some clubs when staying at a resort, as opposed to cleaning and room service costs of a owner/member stay.
Other fees may also arise particularly for things like late payments, late cancellations, transfer of ownership or membership and so on.
Timeshare traps: What to consider before buying a timeshare
- Timeshares are a long-term commitment and can be difficult and costly to exit. While they’re often marketed as a cheaper or smarter way to holiday, that doesn’t always stack up once you dig into the details.
Beware high-pressure sales tactics
Timeshare sales presentations are typically high-pressure and often paired with incentives like free gifts, food, activities, or accommodation. It's not uncommon for Aussies to be enticed by these freebies (and they might actually be worth your time) but, once you’re there, you'll probably be encouraged to make a decision on the spot.
It’s important to remember there’s rarely any real urgency, and taking time to think things through can save you from a costly mistake.
Compare any and all costs associated with the timeshare
Costs can also add up over time. In addition to the upfront buy-in, ongoing maintenance fees, service charges, and special levies may apply - and these can rise.
Booking popular locations or peak travel periods may also require significantly more points or need to be locked in well in advance, limiting the true value of the timeshare for your needs.
It's worth crunching the numbers on how much you'd spend on a timeshare versus simply booking accommodation when you need it. Particularly, given timeshares come with limited flexibility over dates and locations of a holiday.
Read the PDS carefully
Timeshares are considered a financial product in Australia, meaning providers must hold an Australian Financial Services (AFS) licence and give you a Product Disclosure Statement (PDS). Always read the PDS carefully to understand exactly what you’re buying, your cooling-off rights, and how (or if) you can exit the scheme later.
Finally, selling a timeshare can be far harder than buying one. Resale values are often low, transfer fees may apply, and some owners struggle to find buyers at all. On that, some timeshare buyers might plan to pass down their timeshare to their children, those children may find a timeshare to be a financial burden or just less valuable than their parents did.
Before signing, it’s worth considering how a timeshare would fit your lifestyle long-term and what you’d do if your circumstances change.
Advantages of owning a timeshare
- Guaranteed access to holiday accommodation
Owning a timeshare can give you guaranteed access to holiday accommodation for a set period each year. - Can reduce accommodation costs
Because accommodation is often the most expensive part of a holiday, a timeshare can provide some cost certainty when travelling, helping reduce exposure to fluctuating hotel prices. - Can offer a level of inflation protection
Timeshares are generally insulated from short-term inflation. While hotel room rates may rise over time, the number of points or weeks required to book a stay typically remains relatively stable. - Can make organising a holiday easier
For some owners, having a timeshare also acts as a prompt to take a regular holiday each year, rather than putting travel off indefinitely. - Timeshare properties are generally high-quality
Most timeshares operate through clubs or resort groups, meaning members usually have access to well-maintained properties and consistent accommodation standards.
Disadvantages of owning a timeshare
- A timeshare is a long-term commitment
Many Australian timeshare schemes can run for up to 80 years - the maximum period allowed under Australian law - meaning ownership may last for most, if not all, of your lifetime. While it may be possible to sell or transfer your timeshare, transfer fees often apply and resale demand can be limited. - Limited flexibility
If your personal or professional circumstances change and you’re unable to take holidays regularly, paying ongoing fees for a timeshare may feel like poor value. - Availability can be an issue
Popular destinations and peak travel periods may require bookings to be made months in advance, and redeeming points at short notice - particularly at well-known resorts - can be difficult.