Who Narrator What You Get For The Money Hgtv

To gloat the 25th anniversary of HGTV's Dream Home giveaway, the pop cable network is sparing no expense. Not only will the winner receive a sprawling 3,300-square-foot seaside house ten minutes from Newport, Rhode Island, he or she will get a $250,000 mortgage and a brand new motor home.

Information technology sounds like the perfect prize, and millions of by entrants no doubt have thought the same. But, we're all adults here…and then we know that if something sounds too good to exist true, information technology probably is.

The "Reality" of Reality Home Television receiver

As it turns out, it's non unusual for winners of contests like this to be forced to sell the properties because they can't afford the income taxes, property taxes or even the budget. Even winners of habitation make-overs must often sell.

According to HGTV, only one of the first 10 Dream House winners has been able to hang on to their winnings. Just half dozen of the outset 21 winners actually lived in their new digs for more a year.

The longest "survivor," the 1998 winner, kept her dream home in Florida for eight years before selling it. Simply afterwards taking out a mortgage on the place to pay her taxes, co-ordinate to Country Living mag, she used information technology only as a vacation property.

When information technology became obvious that about winners were unable to go along their prizes, many opted to accept the cash option HGTV began offering. Others sold their prize homes, often dorsum to their builders, and rarely at full value.

What's the Problem With Dream Homes, Anyway?

Taxes, more often than not. Since the winnings are considered income, Uncle Sam wants his cut. And often, and then does the country in which the property is located, as do other local jurisdictions which may have taxing say-so.

If you're lucky plenty to win an HGTV Dream Abode, you'll be responsible for federal income taxes on the value of the property or improvements, plus state income revenue enhancement, depending on your state of residence. That means you'll pay taxes at your marginal rate because the value of the prize is on peak of whatsoever income y'all've earned from employment and investments.

Another problem: Most dream home prizes are located in areas with higher costs of living. Compound that even further with holding taxes, homeowners' insurance, utilities and maintenance costs are recurring charges. Oh, and let'south non forget…you may have to furnish the place.

Most people tin't take the hit if they opt to keep the holding, then they have the coin and run. Withal, if you take the cash option, which in the example to a higher place is "just" $1.262 one thousand thousand, the feds would ding y'all for slightly less than $500,000. You'd also owe state income taxes, merely there wouldn't by whatsoever property taxes. Dainty little windfall.

(READ MORE: The Real Costs of House Flipping That HGTV Doesn't Show You)

A Snapshot of Past Winners

The 2007 winner actually ended upward declaring defalcation, in function because he couldn't afford the $2.v one thousand thousand Texas mansion he won, though not for lack of effort. He listed the place for $v.5 million, only after it went into foreclosure it sold for $1.43 million – $1 million less than the local existent estate community said it was worth.

The 2008 winner would have had to pay sales tax of roughly $700,000 plus $20,000 more annually for holding taxes, so she sold her new Florida Keys house for $1.65 million. But simply xiv months later, her buyer listed information technology for auction $1.599 meg. It took two more years to sell, and for only $899,000.

The sales taxation on the 2009 house was $500,000, and the holding taxation was $25,000. And so three months after winning the Sonoma, Calif., manse, the winner sold it for $2.ii million. The buyer was the builder, who marked information technology up 10% and resold it. Only there was a vivid spot – the winner donated the contents of the dwelling, valued at $187,000, to clemency.

The 2010 winner also took a large haircut when she sold the New Mexico firm she won. She listed it for $1.195 one thousand thousand, merely to sell it for $899,000.

The 2011 winners tried to utilise their new Vermont ski-in, ski-out social club equally a vacation abode but merely managed to use it five times before deciding to sell it, Tedesco reports. The place sold for $ii.7 million, more than a million less than the $3.eight 1000000 HGTV said it was worth.

The 2019 winner, Beverly Fulkerson of Osgood, Ind., won a 3,650-foursquare-pes Montana mountain retreat.

Finally, last year'south HGTV Dream Home winner took home a 3,500-square-foot business firm valued at more than $ii million in Pittsburgh, Pa.

In that location'due south no discussion notwithstanding on how the last two winners are faring, but the moral of this story is still clear: unless winners of these types of giveaways plan to sell the places they already ain and motion, they probably can't afford the hit. On the other paw, selling your winnings – or taking the cash instead – could effect in a nice profit.

After reading all of this hasn't deterred yous from entering, that'due south ok – at to the lowest degree you know what to wait! Entrants accept until 5 p.yard. Feb. 17 to enter, and you can enter twice daily until the deadline at HGTV.com, where you will discover all the details and the official rules.

Syndicated newspaper columnist, Lew Sichelman has been covering the housing marketplace and all it entails for more than than 50 years. He is an honour-winning journalist who worked at two major Washington, D.C. newspapers and is a by president of the National Clan of Real Estate Editors.

Source: https://www.homes.com/blog/2021/01/what-really-happens-to-hgtv-dream-home-winners/

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