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Old 01-06-2009, 06:04 PM
 
1,664 posts, read 3,955,562 times
Reputation: 1879

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Quote:
Originally Posted by suecab View Post
Does anyone know how much the local property tazes would be? after paying the IRS & State-
who could afford to live in this house???? I entered the contest, and now I hope that I do NOT win!!
Is the house on an acre of land? Is Sonoma a nice place to live?
I live in New England, so I do not know what it is like out there!

SC
Property taxes in California are 1 percent of the purchase price. Then the local government adds on other "fees" to get around the 1% limit. So you end up paying extra for mosquito abatement, hiking trails, biking trails, open space, drinking water, school bonds, misc. bonds, feel-good programs, homeless shelters and the like! So that could add on another 1/2% or so. It dpends on where you live. The base property tax on a 2 mil house will be $20,000/year.

Hope that helps.
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Old 01-07-2009, 08:21 AM
 
2,238 posts, read 9,014,187 times
Reputation: 954
From watching the show it looked like it was only a 3 bedroom house but over 3K ft and no bathroom downstairs.

It may be pretty but it doesn't seem well thought out.
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Old 01-07-2009, 10:40 AM
 
Location: I'm around town...
764 posts, read 2,036,135 times
Reputation: 981
Quote:
Originally Posted by achtungpv View Post
From watching the show it looked like it was only a 3 bedroom house but over 3K ft and no bathroom downstairs.

It may be pretty but it doesn't seem well thought out.
There is a downstairs bathroom. You can see it in the floorplan--it's next to the study.
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Old 01-07-2009, 10:42 AM
 
Location: Orange County, California
1,016 posts, read 3,055,728 times
Reputation: 481
I would love to live in this house, but if I won, I’d have to sell it. The income and property taxes alone are astronomical!

My dream would be to sell the house, pay off all debts (student loans, cars) and buy a modest dream home. I’d donate some to charity, give my family some and I think that would still leave me enough to invest so my husband and I would never work again! Talk about a nice life!

Here’s how it would shake out (humor me):

2,000,000 prize
-20,000 property tax
= 1,800,000
-320,000 1x Fed income tax (rate of 16%)
=1,480,000
-140,000 1x State income tax (rate of 6%)
=1,340,000
-120,000 closing costs/title (6%)
=1,220,000
-100,000 pay off all debt
=1,120,000
-120,000 (charity & family)
=1,000,000
-500,000 BUY MY DREAM HOME!!!
=500,000 balance to invest

That sounds like an awesome scenario to me!

The official rules allow for the home to be sold, in fact almost all past winners have done this.

http://contests.about.com/od/taxesfinanc...
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Old 01-07-2009, 10:57 AM
 
Location: The Big D
14,862 posts, read 42,858,565 times
Reputation: 5787
Quote:
Originally Posted by T. Damon View Post
I don't think that ANY of the winners in the past dozen years have actually been able to afford the house that they won and all had to sell within a couple of years.

Be careful for what you wish for...
Quote:
Originally Posted by pureistheword View Post
I looked at the site. Besides being liable for all the property taxes, they will issue you a 1099 on the value of total prize. So unless you are rich, it would be a burden to win this it seems
Quote:
Originally Posted by Refuge51 View Post
I think I read once that HGTV pays the first years taxes.
I wouldn't be able to afford it although I did enter, but after selling it, I could still get a pretty nice affordable place in beautiful Sonoma.

Some fool won the HGTV Dream Home they built a few years ago in Tyler, Texas on the lake (2005). He was already unemployed and had a disability. They packed up their stuff and moved to Texas to actually live in the house. When he got the tax bill he tried to turn the place into a Bed & Breakfast or some kind of lodging. Which the community in which the house was built forbid any type of "lodging" or multi family residences. He actually tried to fight it in court and ended up losing even the money he would have made from the sale of it. The house was AUCTIONED OFF last year after failing to sell on the market after being foreclosed on in Jan. 2007.

When all of this was going on HGTV even came out and said that most winners do not keep the property because they know they will have to pay the taxes on it. Not just the property taxes but the taxes on the estimated value of the "winnings".

In response to the foreclosure news, HGTV issued the following written statement:

"...there are always options available to winners, including, in many cases, the option to sell the home back to the developer during the first year of ownership and receive cash, as there was in the 2005 HGTV Dream Home Giveaway. We know that Don Cruz and his family had a strong desire to remain in the dream home and now find themselves in this current challenging situation. As we have from the beginning, we will continue to respect their right to make their own decisions."




Here are a few links to stories about it:
Tyler Dream Home Has New Owner - Tyler, TX Blog
Dream come true for HGTV winners? - Real estate- msnbc.com (This one is really good and tells what HGTV pays and does not and other "prizes" to help the winners)

KLTV 7 News Tyler, Longview, Jacksonville |HGTV Dream Home Owner: "Foreclosure Proceedings Have Begun"
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Old 01-07-2009, 03:18 PM
 
Location: Orange County, California
1,016 posts, read 3,055,728 times
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Yeah I heard about the Cruz's auctioning off the Lake Tyler Dream Home for $1.3M. I though it was a great idea to auction off the furnishings seperately as well...
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Old 01-07-2009, 07:23 PM
 
Location: The Big D
14,862 posts, read 42,858,565 times
Reputation: 5787
Quote:
Originally Posted by cabolissa View Post
Yeah I heard about the Cruz's auctioning off the Lake Tyler Dream Home for $1.3M. I though it was a great idea to auction off the furnishings seperately as well...
The Cruz's did not auction it off. The BANK DID! The Cruz family got foreclosed on due to not being able to pay the taxes on it.
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Old 01-09-2009, 06:37 AM
 
57 posts, read 382,065 times
Reputation: 93
Geez...why did you enter if you don't want to win?
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Old 01-09-2009, 09:20 AM
 
Location: The Big D
14,862 posts, read 42,858,565 times
Reputation: 5787
Quote:
Originally Posted by rachelinala View Post
Geez...why did you enter if you don't want to win?
They do want to win. Problem is they don't realize that ANYTHING and EVERYTHING they win they MUST pay taxes on it and when it comes to actual real property......... property taxes on it. HGTV is not building thrown together shacks w/ no indoor plumbing. They are building "dream homes" w/ all of the latest trends and FULLY FURNISHED (yes, they have to pay taxes on the furnishings as well). HGTV has advisors for the winners to help them understand all of this. But this family was deadset thinking they could just pack up the brown paper bag and move on down and set up home. Not realizing that in the areas they build these homes you can't turn the house into a boarding house or such to try and earn money to afford to live there. Now these people lost this house to foreclosure AND in the last news report from a year ago were in the process of getting their house in Chicago that they had when the "won" foreclosed on.

On all of these game shows on tv when someone wins a car.............. unless they have the money sitting in the bank to pay Uncle Sam the taxes on it they are going to have to sell the car to pay the taxes. Then they can keep the remainder. If you win a $25K car your going to have to cough up about $10-12K in taxes right off the bat. No payment schedules or anything. Same goes for the lottery. Reason why most people if they were not smart about money before they won...... they end up losing it all in a matter of years and filing bankruptcy.
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Old 01-09-2009, 03:10 PM
 
2,238 posts, read 9,014,187 times
Reputation: 954
Quote:
Originally Posted by momof2dfw View Post
If you win a $25K car your going to have to cough up about $10-12K in taxes right off the bat. No payment schedules or anything. Same goes for the lottery. Reason why most people if they were not smart about money before they won...... they end up losing it all in a matter of years and filing bankruptcy.
Game shows usually give you an option of taking the prize value in cash instead (coworker's brother was on the Price is Right). I wonder if HGTV does the same thing? It'd certainly save the trouble of signing over a house that'll just be sold back to the developer immediately.
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