If you’re eyeing a vacation‑ownership deal, the first thing to ask yourself is: how much will it really cost? It’s easy to get caught up in the promise of a cheap holiday each year, but the numbers add up fast. Below we break down the major costs so you can see the full picture before you sign anything.
The most obvious expense is the purchase price. This can range from a few thousand pounds for a low‑season week in a remote resort to tens of thousands for a prime‑time slot in a popular destination. Remember, the headline price often excludes taxes, legal fees, and the cost of a financing package if you need a loan.
Financing a vacation ownership works much like a regular mortgage. Lenders will look at your credit score, income, and the interest rate they can offer. A typical loan term is 10‑15 years, and monthly payments can be similar to a modest mortgage. Use a simple calculator: (purchase price × interest rate) ÷ loan term ≈ monthly payment. This helps you compare the loan cost against renting the same week each year.
Once you own a share, you’ll pay annual maintenance fees. These cover property upkeep, staff salaries, and utilities. Fees often start around £300‑£500 per year for a small unit, but they can rise quickly if the resort adds new amenities or suffers inflation.
Another recurring cost is the “exchange fee” if you want to swap your week for a different location. Companies that manage exchanges charge a per‑transaction fee, usually between £100‑£250. If you plan to trade often, those fees can dwarf the maintenance cost.
Don’t forget resale costs. Selling a vacation‑ownership share isn’t like selling a regular home; you’ll likely pay an agency commission (5‑10% of the sale price) and possibly a resale fee to the developer. Many owners end up buying back their own week for less than they paid, which means a net loss.
There are also hidden taxes. In the UK, certain vacation‑ownership arrangements are subject to VAT, and if you rent out your week, you may owe income tax on that rental income. Check with a tax adviser to avoid surprise bills.
Finally, consider opportunity cost. The money tied up in a vacation‑ownership could be invested elsewhere, potentially earning higher returns. Run a simple comparison: total annual cost of ownership versus the cost of renting the same week on a site like Airbnb. If renting is cheaper and more flexible, ownership might not be worth it.
Bottom line: Vacation ownership can be a great way to lock in holiday time, but only if you understand every cost involved. Look at the purchase price, financing terms, annual fees, exchange charges, resale commissions, and tax implications. Do the math, compare it to renting, and decide whether the peace of mind outweighs the expense.
