What's a Home Lottery?

Cash prizes aren't the only things lottery players can win.
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Aerial photograph of a luxurious mansion with a swimming pool in the back garden
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  • Author:
    William Monroe
  • Published:
    17/08/2018

Most lotteries that exist are there to provide attractive amounts of money to players. But, did you know that there are some lotteries in which a house is the main prize?

Now, winning a house sounds exciting, and it definitely is. No mortgage, free and clear, and yours forever. But winning a home –rather than a cash prize – is not without its drawbacks, and a lot of ticket purchasers tend not to take them into consideration.

The homes that ticket buyers can win are usually large luxury homes worth over $1 million dollars and more, with tickets typically ranging from $20-$100 each, and with discounted prices for multiple ticket purchases. So, for a very small cost, the return can be astronomical, just like with a cash lottery game.

What Do These Houses Look Like?

These homes usually come fully furnished, fully decorated, and fully landscaped. They might include gym rooms, a huge kitchen with quartz countertops and large islands, an entertainment room filled with a huge television, cable or satellite subscription for one year, and radio available in every room of the house.

Multiple bathrooms and bedrooms abound, and there is more space for food and clothes storage than you could ever need. And, normally, a cash prize is awarded along with the house, sometimes a car as well. Once the title is transferred into the winner’s name, they can do whatever they want with the house.

What's the Catch?

The reality is that a large luxury home is going to have a large luxury land tax. So, the cash prize that is awarded along with the house is meant to be used to cover the first year’s taxes. After that, you are responsible for finding the money to pay the taxes.

If your cash prize is $25,000, and your income is sufficient enough for you to pay the $25,000 land tax each year, then you really did win a great prize. For most people, though, their income would never come close to being able to pay the tax, so in most cases home lottery winners end up selling their new home.

On one hand, it’s a sad event. Winning a million or multimillion-dollar home with no mortgage to pay is a top dream for many people.

But once the expenses start piling up for insurance, taxes, and maintenance, most winners end up selling their homes. And, of course, they are not going to get the real value of the home. A $2.5-million home may only sell for $1.1 million—way below the real value of the property.

You've Still Won a Big Prize

On the other hand, most winners who sell do end up on the winning end of the deal. Even if the winner only gets to pocket $1 million after selling their dream lottery home, it’s like they won a million dollars in the lottery. Yes, they have to get rid of their prize, but they still receive a large cash prize in the end that, if used wisely, can get them a nice home and then some.

So really, even if you take into consideration that you will probably have to sell the home if you win it, you may still come out with over a million dollars in your pocket if you win a home lottery.

Yes, tickets are more expensive than a regular cash lottery, but the prize - whether you keep it or sell it - is a way to a better life.

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