ByAdrianna MacPherson/Updated: March 29, 2022 10:02 am EST
If the idea of winning an incredible, luxurious piece of real estate in a competition sounds like a complete dream to you, well, you're certainly not alone. For over 25 years now, individuals have been entering their names in the HGTV Dream Home Sweepstakes, which as People reported, began back in 1997.
Over the years, there have been Victorian-inspired properties, rustic log cabins, modern masterpieces, and everything in between, located in every corner of the country, from Florida to California to Wyoming and more. The HGTV Dream Home contest is running right now, with the winner getting a chance to own a contemporary mountain cabin in Warren, Vermont.
If you're a real estate lover, you might have eagerly tuned in to see what the 2022 HGTV Dream Home would look like and where it would be located. Perhaps you're already picturing yourself winning the sweepstakes and relocating to idyllic Vermont. However, before you rush to begin entering your name as many times as permissible before the February 17 deadline hits, you may want to pause for a moment and rethink whether you actually want to be crowned this year's winning homeowner. That's because, while each year's Dream Home is completely unique, there seems to be one running theme throughout the contest — many of the winners actually regret being selected and gifted that HGTV Dream Home.
What's prompting the winners' regrets?
It may seem unthinkable to be upset about living in a multi-million dollar home on a prime piece of land, but here's the thing that many people don't always realize about winning such a massive prize — as Vocativexplains, you still need to pay the taxes. For many winners who would never have even considered buying a home with such a high valuation, that tax bill is just way too big to handle, and they're unable to stay in the homes, even if they truly love them and wish they could.
And, it seems the winners don't even get to enjoy their dream digs for very long. Country Living reported that by 2018, with over 20 HGTV Dream Home winners crowned, only 28% of the winners actually lived in the home for over a year. Since those properties with valuations of over $1 million can come with tax bills into the high hundreds of thousands, the vast majority of winners end up either selling the homes back to the developers or just accepting the cash alternative, which is a lower amount but consequently comes with less tax responsibilities and associated costs.
So, before you go throwing your hat in the ring for this year's prize, you may want to consider exactly what kind of burden such an expensive piece of property may place on your finances.
The winner that held on longer than anyone else
Given the seriously steep price tag on the HGTV dream homes — and the equally pricy tax bill that comes along with winning one — it likely comes as no surprise that most winners opt to sell the house after winning. After all, as Vocativ explains, being deemed the lucky winner for a home worth $1.75 million will cost you nearly $700,000 in federal income taxes, plus additional bills for real estate taxes, state income taxes, and other costs. Even those who decide to see what living in such a luxurious property is like tend to sell rather quickly.
There is, however, one winner who held out longer than any other recipient — Tina Carlson, who entered the competition and was deemed the winner all the way back in 1998, just the second year the competition was held. Though Carlson lived in Thousand Oaks, California, the home she won was located in Beaufort, South Carolina, as per Live About.
Without a string of former winners' decisions to influence her, as there was only one other winner before she earned the title, Carlson decided to keep the home. She ended up being the proud owner for eight years, using the Southern dream home as a vacation spot and even trying to get some income by making it a rental property, as Country Living reports. Ultimately, though, the tax bill was just too high, and she sold the Beaufort property in 2005.
The ultimate weekend
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When an HGTV Dream Home Sweepstakes participant is notified that they've snagged the winning ticket that year, you might think that the home itself is the ultimate prize. However, for many of the winners, the legendary Winner's Weekend is actually one of the best parts of the experience (and it doesn't come with a super-sized tax bill). The 2005 winner, Don Cruz, was one of the many who ended up selling the home after just a few years, as per Live About. However, the experience didn't exactly leave a bad taste in Cruz's mouth — on the contrary, he continued to enter in the following years, with the hopes of being a two-time winner.
And, it seems a big part of that could have been due to the incredible Winner's Weekend. As Cruz said, "the Winner's Weekend was an amazing experience." He and his family had the opportunity to stay "in the finest hotels," eat "at the best restaurants," and ride around town in a stretch limo, even meeting a celebrity, country musician Dwight Yoakam.
One of the designers behind several of the homes spilled to People that the famous Winner's Weekend can also include special activities based on where that year's home is, such as boating excursions or ski trips. Of course, as Do You Remember explains, the winner also gets a designer-led tour of the home — and the sponsors are there to celebrate with them, adding to the festive atmosphere.
HGTV's surprising expectation
When it comes to the odds of the winner actually spending an extended period of time in their multi-million dollar dream home, they're historically pretty slim. As Country Living reported, as of 2018, only six of the 21 winners spent more than a year living in the residence — most sold very quickly, often after taking a ritzy vacation or two, and others just went with the cash price right from the beginning.
However, it turns out that HGTV isn't even that upset about those odds. In fact, Ron Feinbaum, the Dream Home general manager, commented that HGTV doesn't envision actually living in the home as the ultimate outcome. As he told Country Living, "winning one of these homes is life-changing in that recipients either pick up their things and move or they suddenly have a large savings account." A spokeswoman for HGTV expressed a similar sentiment to the Pittsburgh Post-Gazette, stating "our vision of the dream is that it enables you to do what you want to do."
For some winners, that means risking it all and doing everything possible to afford the astronomical taxes and upkeep. For others, it means taking the cash immediately and perhaps buying a more reasonable dream home. For others yet, the dream home becomes a once-in-a-lifetime vacation headquarters for a little while. Regardless, every year, there are countless people from all across the country frantically entering as many times as possible, looking to win that golden ticket.
How much do HGTV Dream Home Winners pay in taxes? ›
In fact, it's probably fair to say that no winner of an HGTV Dream Home could easily afford to take the prize, given the immediate tax bill. CNBC estimated the taxes on the 2019 Dream Home at $907,677. The annual property tax bill alone (about $12,60 for the 2019 winner) has proven too daunting for at least one winner.Do people actually win the HGTV Dream Home? ›
Dream Home winners receive prize packages including the house, cash, a car, and more totaling between one and three million dollars! Since its 1997 conception, the HGTV Dream Home Sweepstakes has since grown into one of America's biggest and most popular giveaways.What really happens when you win the HGTV Dream Home? ›
In lieu of taking title to the HGTV® Dream Home 2023 (and the contents of the HGTV® Dream Home 2023), the Grand Prize Winner will have the option of receiving $750,000 in cash (the “Cash Option”).Why are taxes so high on HGTV Dream Home? ›
That means you'll pay taxes at your marginal rate because the value of the prize is on top of any income you've earned from employment and investments. Another problem: Most dream home prizes are located in areas with higher costs of living.How many HGTV Dream Home winners kept the house? ›
And, it seems the winners don't even get to enjoy their dream digs for very long. Country Living reported that by 2018, with over 20 HGTV Dream Home winners crowned, only 28% of the winners actually lived in the home for over a year.How much are the taxes on the HGTV Dream Home 2023? ›
Santo said the winner also has to pay income tax. According to HGTV, the grand prize includes the fully furnished house, plus $50,000 cash, valued at a total of about $684,000. Santo says the winner will be taxed at the top federal rate of 37 percent. Add on state taxes, and they'll owe between $238,000 - $266,000.What is the cash payout for HGTV Dream Home 2022? ›
She is the winner of the HGTV® Dream Home 2022 sweepstakes, a grand prize package valued at over $2.4 million.Who won the HGTV Dream Home in 2022? ›
Meet the lucky winner of HGTV Smart Home 2022 in Wilmington, NC. Congratulations to Leah Nadorff of Columbia, South Carolina; she is the winner of the HGTV® Smart Home 2022 sweepstakes, a grand prize package valued at over $1.2 million dollars. "It's a whirlwind. Totally surreal.Where is the 2023 HGTV Dream Home located? ›
See every stunning space from HGTV Dream Home 2023, a grand mountain escape packed with high-end design and located in Morrison, Colorado.Do guests on HGTV get paid? ›
To put it simply, no. While HGTV doesn't specifically address payment in their application, they do note that homeowners now must have a $100,000 renovation budget (this requirement was previously $50,000 and then $75,000). So we assume that means participants are not in this for the paycheck!
Why are renovation costs so low on HGTV? ›
"HGTV pays for some labor or costs to expedite production if needed, but generally, homeowners are paying for their services. And, they may have access to discounted services or goods." So a new kitchen island that costs $1,000 might actually cost $3,000 if the homeowners weren't being featured on a TV show.Can you airbnb a HGTV Dream Home? ›
But here's a bit of information that the HGTV fans may not be aware of - many of the stylish homes appearing on the network's shows are available as vacation rentals through websites such as HomeAway, Airbnb and VRBO.How do I avoid paying taxes on prize winnings? ›
5 ways to avoid taxes on lottery winnings
- Consider lump-sum vs. annuity payments. ...
- Charitable donations. ...
- Gambling losses. ...
- Other deductions. ...
- Hire a tax professional.
HGTV's annual Dream Home sweepstakes began in 1997 with a house in Jackson Hole, Wyoming. Every year since, one lucky winner is chosen out of millions of entries: in 1998 there were 2.5 million entries; in 2016 there were around 127 million entries .How many bedrooms and bathrooms are in the HGTV Dream Home? ›
Designed by Western Design Group and built by Mountain Plain Homes, the 4,360-square-foot property boasts three bedrooms and three bathrooms. HGTV decorator Brian Patrick Flynn, who helmed the house's interior design, spoke with PEOPLE about its unique style and one-of-a-kind features.What age do you stop paying taxes on Social Security? ›
Are Social Security benefits taxable regardless of age? Yes. The rules for taxing benefits do not change as a person gets older. Whether or not your Social Security payments are taxed is determined by your income level — specifically, what the Internal Revenue Service calls your “provisional income.”How do taxes work if you win a house? ›
If you win a house in a contest, you'll have to pay federal income tax on its value. Also, depending on your state, you may have to pay state income tax on any house you happen to win in a contest. Under Internal Revenue Service (IRS) rules, any prizes won in contests are taxable at the marginal tax rate.Do people on HGTV pay for their renovations? ›
There's a common assumption that making it on a show comes with a free renovation, or at least discounted goods. On the contrary, homeowners have to come up with the money for the projects.What are the odds of winning the HGTV Dream Home 2022? ›
200 in 136 million, or about 675,000 to one.