Fractional ownership simply means the division of any asset into portions or shares. If the “asset” is a property, the title or deed can be legally divided into shares. In certain instances this is done by creating a company which owns the property then allowing multiple owners or investors to own shares in the company. Those shares can then be purchased and owned by more than one individual.. Two common reasons are to allow transfer of shares without the need to reflect changes on the title or deed to the property, and for tax benefits.
Shared ownership of the property and its deed will also entitle shareholders to certain usage rights, usually in the form of weeks. Conceptually, fractional ownership is not the same as timeshare. Fractional ownership affords much of the freedom and usage benefits offered in timeshare, however, the fundamental difference with fractional ownership is that the purchaser owns part of the title (as opposed to units of “time”). Therefore, if the property appreciates in value, then so do the shares. As with whole ownership, fractional owners can sell whenever they deem necessary or prudent, releasing the capital growth from their “bricks & mortar” investment.