HGTV Dream Hounse Turns Out to be a Nightmare, Thanks to the Tax Man

[TXCharlie]

http://www.pegasusnews.com/news/2008...lock-saturday/

Friday, January 11, 2008
HGTV Dream Home in Tyler on the block Saturday

By Mike Orren

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Beard Auction
Dream Home or nightmare?

TYLER — Every year, April avidly follows and repeatedly enters the HGTV Dream Home competition. They build a ridiculously amazing house, furnish it, throw in a car and some extra prizes and give the whole thing away.

The sad truth, though, is that seven of the nine winners have had to sell the house because they couldn't afford the tax burden. HGTV always builds these monstrosities in restricted communities that have all kinds of covenants that prevent the winners from using them for commercial purposes like Bed & Breakfasts -- eliminating any hope of holding on to the prize.

See the original tour

HGTV: Tyler Dream Home

Perhaps the saddest example yet goes on the auction block in Tyler this weekend. The Tyler home, given away in 2005, was by far the biggest and nicest one yet. The Chicago family who won moved to Tyler and tried to make a go of it. But the $600k / year in property taxes and upkeep has become too much, so they went to an auctioneer to avoid foreclosure.

By my math, since the house is expected to sell for about a third of retail, this family's going to come out behind anyway. Nice prize. I imagine HGTV makes out like a bandit on the sponsorships on this deal, excites thousands of entrants, and then this happens year in and out.

We're probably going to go check out the house and auction tomorrow. But I'm no longer so eager to see us win such a prize.

[Ender]

er...50 grand a MONTH in property tax?!?!?!

[gwebb1981]

Next you will see this home on "Flip This House"

[TXCharlie]

Yeah, I think the reporter screwed it up on the property tax quote - $600k sounds like the IRS income tax, which is about 1/3 the value of the house. The other article was probably more correct quoting property taxes at $25k per year.

Still, that's one of those things I'd have to sell as soon as I won it. It's bad enough to win a $30,000 car and get a $10,000 bill from the IRS, but a $600,000 bill from the IRS? No way!

[Lazy Fed]

So all they had to pay was $25,000 a year in taxes??

[hush29]

So all they had to pay was $25,000 a year in taxes??

"all they had to pay" f**k that noise!

[Willowdared]

People always forget about the taxes.

Living here in SoCal, I have lots of friends that have gone up to LA to be on game shows. You have to pay taxes on those prizes before you can even get them!

I think almost all sweepstakes these days include a cash buy-out, if you don't want the big prize.

Take the cash!

[bayern]

People always forget about the taxes.

Living here in SoCal, I have lots of friends that have gone up to LA to be on game shows. You have to pay taxes on those prizes before you can even get them!

I think almost all sweepstakes these days include a cash buy-out, if you don't want the big prize.

Take the cash!

Not only that, but think of the College kids on those shows. They win LARGE, there goes their student loans, etc, that ae based on income (theirs or their families). Nice car - sorry, your loan is not renewed, your income is to high.

[Morris]

There has also been a real problem with those houses you see in the Makeover:Home Edition homes you see. In many cases, after the homes are built, they are reassessed at a much higher value and the poor family already now pays a significantly higher bill for taxes, one that exceeded their old mortgage in some cases.

We had a house done in Western Washington in which the mother was nearly forced out of it due to the new "assessment" and subsequent higher taxes.

There is something terribly wrong with our current tax system.