Just a Quick Reminder That Winning the 2021 HGTV Dream Home Can Be a Real Disappointment
Each year, tens of thousands of HGTV fans enter for their chance to win the Dream Home of the year. The perks get better every year, with plenty of prizes including cash, vehicles, and other extras that are worth millions of dollars.
Winning the Dream Home seems like a total dream come true. However, the reality is a little trickier than that. It’s well documented that most winners can’t actually afford to keep their “free” houses and some even wind up in a worse financial situation than when they started.
Why? One simple word: taxes.
The HGTV Dream Home 2021 is bigger and better than ever
After a challenging 2020, people are eager for a little happiness in their lives. And dreaming about a luxury abode may be just the way to do it. HGTV announced that their annual sweepstakes would include a classic waterfront escape in Newport, Rhode Island.
The house has all the nautical features you’d expect in a coastal community, most notably a rooftop deck that shows off the waterfront views. The entire home is done in dreamy shades of cool blues and greens the evoke the ocean. Overall, it’s a sophisticated escape anyone would love to own.
This year’s prize comes with a big twist. With camping and adventures more popular than ever, the prize package includes a 2021 motorhome courtesy of Camping World. The winner will also enjoy $250,000 cash from Rocket Mortgage.
Most people can’t afford to keep the HGTV Dream Home when they win
Winning a free house sounds like the best thing that could happen. However, most winners don’t realize the heavy tax burden that comes along with winning. Since the IRS treats any prizes as earned income, and taxes them accordingly, leaving average people with a huge sum to pay on a multi-million dollar property regardless of their income.
And that doesn’t take into account other unforeseen expenses, including higher utility bills such as heating and cooling, property taxes, and other maintenance costs. It’s all enough to make some winners wish they’d never lucked out in the first place.
Former Dream Home winners say it’s all worth it
While most Dream Home winners don’t end up keeping the houses they win for all the reasons listed above, a few swear they still enjoyed the experience of winning. For one thing, winners get to enjoy a mini vacation called a Winner’s Weekend where they get to stay in their new home plus get treated to other perks.
The 2002 winner Milton O’Bryant explained the experience, saying, “It is almost magical the first time you get to tour the house. When we arrived in Annapolis, we were greeted by a wonderful staff that took care of all of our needs. You will eat the finest foods, visit the area’s best attractions, and receive numerous gifts and keepsakes.”
And, if they’re smart, there are ways winners can end up making out financially too if they call the right people. There is even a small chance they can keep the house and live in it.
HGTV Dream Home winners should ask professionals for money help
Winning the HGTV Dream Home doesn’t have to be terrible. The first thing winners should do is call a financial professional to help determine their best course of action for the house and prizes. Some workarounds for the tax burden could be taking out a mortgage on the house to help pay for extra expenses, thebalanceeveryday.com explained on their website. Another option is setting up a payment plan with the IRS rather than trying to pay the taxes in one lump sum.
It’s not impossible to keep the HGTV Dream Home. But winners should be realistic about how their lives will change, if at all, even after winning one of the biggest annual sweepstakes in the nation.