Every year, HGTV gives away a fantastic house as the grand prize in the HGTV Dream Home Sweepstakes. This once-in-a-lifetime prize, which includes a custom-built or lovingly-renovated home in a fabulous location as well as landscaping, furnishings, cash, a vehicle, and more, is usually worth well over a million dollars.
A rule of thumb is that you pay about a third of the ARV in taxes in the United States. Of course, this varies a lot depending on your individual tax bracket. But consider that you'd suddenly be responsible for over $300,000 in taxes. Could you afford that? The cash that comes with the house will help, but you'll still be responsible for everything from moving costs to maintenance and utilities on your enormous new home.
At the time of this writing, none of the winners has been able to keep their Dream Home permanently. 2005 winner Don Cruz tried to keep and live in the home, but he went bankrupt in the process (although he said that the experience was well worth the upheaval). The high taxes caused every other winner to either sell quickly or take the cash option.
Now, selling or taking the cash option is not a bad thing; Winners end up hundreds of thousands of dollars richer and have an amazing experience to boot. But selling the house is a disappointing thought for people who imagined themselves enjoying all of the luxuries of the beautiful home they watched on TV.
Which causes many people to ask: Why doesn't HGTV give away a Dream Home that winners can afford to keep?
HGTV Has a Reason for Going Big with the Dream Home Sweepstakes
The Dream Home Sweepstakes is not all about giving. HGTV has a business reason for holding this big annual giveaway: They use it to showcase their skills and their sponsors' products.
By constructing or renovating an absolutely amazing home, HGTV inspires its viewers to be more motivated to improve their own homes. And HGTV and its sister companies offer a wide range of tips, advice, and products to help people do so. So the inspiration offered by giving away a luxurious home builds viewership for the HGTV television channel.
The buzz about the Dream Home giveaway is a massive driver of traffic to the HGTV website and social media pages, helping them attract more online followers.
Plus, HGTV outfits their Dream Homes with kitchen appliances, bathroom fittings, paint, and more from major brands. Those brands want to show off their very best products so that people are encouraged to buy them, and they pay for the privilege.
The Dream Home Giveaway makes money for HGTV and its partners by giving viewers inspiration for ideas they can implement in their own homes. Exposure in the Dream Home series can boost sales for everything from paint colors to furniture styles. It increases demand for local builders and artists. It's big business.
Building an average home wouldn't have the same effect. Creating an eye-popping home is far more successful for the companies involved.
But There's Good News If You Want to Win a Home You Can Keep
If you want to win a home you can actually live in, there's hope. The HGTV Dream Home is not the only house that Scripps Networks gives away, and some of the other big home sweepstakes offer more affordable prizes.
For example, HGTV also holds a Smart Home Sweepstakes (which replaced the environmentally-friendly Green Home Sweepstakes in 2013). The Smart Home 2016, worth a total of $1,378,076, was at least slightly more affordable than the $1,750,756 Dream Home, and it also included a cash option for the winner.
HGTV also offers a luxury apartment giveaway in the Urban Oasis Sweepstakes. The 2020 Urban Oasis prize was worth only $684,101 and $50,000 of that was cash.
You Can Still Get Your Dream Home, Even If You Can't Keep Your Dream Home
Whether you can keep the prize or not, entering these giveaways can still help you achieve your dream home.
HGTV has made it easier for Dream Home winners to handle the tax consequences. In recent years, they've not only offered cash as part of the prize package, which helps make the taxes more affordable, but they have also offered a cash option in lieu of the home.
Winners who take the cash option would still receive the car, furnishings, artwork, and the cash, but instead of taking possession of the Dream Home itself, they receive a hefty cash payout. Many winners have donated the furnishings to charity to help with tax write-offs while doing some good in the world.
And with the extra cash? Winners can buy an amazing new home in an area of their choice, or do a complete remodel of their existing home. They end up in a home they love, no matter what.
So if you're looking to win a more affordable home, wait for the Urban Oasis or any of the lower-value homes given away by other sponsors. Check TheBalance's Mega Sweepstakes List for current giveaways or find out how you can use sweepstakes to remodel your home.
As long as HGTV is giving a cash option, enter the Dream Home Sweepstakes without fear of the tax consequences. Over a million dollars in cash is a sweet prize, whether you want to take possession of the home or not.