TIMESHARING AND FRACTIONAL OWNERSHIP SCHEMES
Timesharing and fractional ownership schemes
A time-sharing scheme is legally defined as a scheme, undertaking or enterprise, whether in Australia or elsewhere, that operates for a period of three years or more and in which participants are, or may become, entitled to use, occupy or possess the property for two or more periods.
Interests in time-sharing schemes are regulated by ASIC as financial products under the Corporations Act.
In a traditional time-sharing scheme, investors acquire “points” or interests in the scheme which they can then use to book holidays at any of the scheme’s properties. The custodian for the scheme generally holds the legal title to all the properties owned by the scheme.
A fractional or shared ownership scheme is a form of time-sharing scheme, however, the investors are on the title to a property as a tenant-in-common with other investors, and potentially share in any capital gain (or loss) arising from the change in the property’s value.
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