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Readers Respond: How Would You Pay the Taxes on the HGTV Dream Home?

Responses: 339

By

Hire a professional!

I'd hire a tax attorney who specializes in creative ways to afford life! Most respondents here are resigned to selling, but I'd do my best to hang on to that prize money, put off paying the IRS for as long as possible, and figure out how to keep the house. I've seen indicators here that the Stowe house taxes are $24,000. That's higher than my home in a Chicago suburb; kind of scary. Still, I love love love the Stowe house. I'd look at every angle before just giving back such a rare asset.
—Guest Fantasy Dream Home Owner

Fantasy vs. Reality

My FANTASY sees me enjoying the Stowe gem with my family & friends for as long as possible: cooking for everyone, making s'mores in the fireplace by the hot tub, watching movies in the family room after a day of skiing, enjoying morning coffee with my hubby on the deck . . . The REALITY--something I prefer to ignore--is vague since the total cost of the entire prize hasn't been detailed (e.g: monthly association fees? taxes on total prize? can house be rented; if so, for how much?). I suspect owning this home is out of my reach, but man is it ever fun to imagine entertaining in this gorgeous mountain nest! Until my name is drawn, I'll continue with the FANTASY of the prize, ignoring the REALITY entirely. I'm entirely thankful to HGTV for providing so many people the opportunity to dream so far beyond our own imaginings!
—Guest Stowe Dreamer

TAXES

I WOULD TRY TO KEEP IT. I WAS A SINGLE MOTHER OF 5 CHILDREN THAT ARE ALL GROWN UP NOW. I HAVE NEVER OWNED A HOUSE BUT I HAVE A DAUGHTER IN LAW THAT HAS MANAGED RESTURANTS BEFORE SO I WOULD TRY TO START A B&B TO PAY THE TAXES.
—Guest R ROGERS

I would sell...

If I had the means to keep the house, believe me I would. Unfortunately it is too much, house for me and my husband to afford it. We both work in an export company of heavy machinery as shipping consultants, it does not provide much to afford that house. So I would sell it. Even after paying all the taxes you still have money leftover to buy a decent more affordable home for yourself. I pray to God that we get this wonderful opportunity.
—Guest tillithy hoaping big

Think about it!

Everyone is talking about the tax on the home right... what about the $500,000 and the GMC. You do have to pay tax on the house, the cash, and the vehicle. Whomever is to win... the logical thing to do is take the $650,000 instead of the house. So you'd end up with a little more than $700,000 and an Acadia Denali after you pay the tax. The house isn't worth the headache.
—Guest Josh

you know what

i would love to have the house even if its high.yah people hgtv
—Guest tasaha

It's all good

I would work and try to pay the taxes. Making about 100,000 a year one could probably do it. A good tax adviser/lawyer consult would be prudent.
—Guest julie

Not enough cash for taxes

According to this web site http://www.bankrate.com/brm/news/advice/20020520b.asp $500,000 will not be enough to pay the fed tax on the house prize. Its worth over 2 million. Fed tax on 1 million would be aprox 359,000. I would take the cash and car and walk away with about 600,000 after fed and California tax. Buy modest house here free and clear.
—duanedoug

How would I pay the taxes.

I would use the money I make from my clothing company to pay them. In addition to that I will also coach swimming at the local school, ymca etc.
—MikeSPNJ

5ook

thats why if you win the house you also win $500,000. to pay the taxes on house and car.
—Guest david

I love the house...but...

Have you all seen this blog... More details from a prior post: http://www.vermonttiger.com/content/...xing-gift.html "As a public service, Vermonttiger presents the numbers: 1. Vermont Purchase and Use Tax on a $50,000 vehicle at 6% = $3,000 2. Vermont Property Transfer Tax on a $1.5 million house at 1.25% = $18,750 3. Annual Property taxes on a $1.5 million house in Stowe = $24,350 4. U.S. Income Tax on $2.05 million (house + cash + car) at 2011 tax rates a. assume Bush tax cuts do not expire as per Obama compromise plan = $678,000 b. assume Bush tax cuts expire = $772,000 5. Vermont income taxes = $187,400 The lucky winner of the house will pay about $1 million in taxes in 2011 on their good fortune. With the $500,000 cash that is part of the winning package, the winner will only have to come up with an additional half million bucks. Maybe they can rent out some of those extra beds to help pay the taxes."
—Guest ebilodeau

Take the cash prize

As much as I love the house, I'd take the cash option. 1.2 million plus a car isn't a bad payout. After federal taxes, you should still 'bring home' about $750,000. Invest that at a modest interest rate and you've got a nice little nest egg.
—Guest Steve

Give it to the children

I would donate it to the make a wish foundation. I never get what I want or what I feel I need. I'm a hard worker and I know God is on my side. But, it is what it is. So if I can't be happy then I would love to make those little angels happy and feel like I finally did something great . Something I could be happy about.
—Guest Faith

Just do it!

i would definitly find a way to stay in the home. i am from LI NY i pay 9000 a year in taxes on 1100 square feet. i will sell my home and move to VT. if there is a will there is a way.
—Guest karen

It could be your biggest nightmare

The Dreamhome is a fantasy that only someone with means can enjoy. NO ONE HAS BEEN ABLE TO KEEP ONE. It is nice to think about using it for rental or B&B but the rules or area codes forbid such things. In some cases, you don't even own the property thanks to HGTV and SCRIPPS. Revers mortgage might be an option if you are 65 years old, maybe not. An attempt at keeping the dream will most likely include selling your present house. Then when you do finally lose the dream, you have no where to go. Many have asked why HGTV continues to build Dreams that cannot be afforded and HGTV continues to ignore the sad saga every year and builds another nightmare named DREAM HOME. The fact is, HGTV tells you you will live in splendor, calls it YOUR NEW HOME and talks of it as if you can keep the new home when reality screams that it is too expensive to keep, yet this year, another overprice dream is built. It would be so nice if HGTV would just build an affordable DREAM HOME for keepes
—Guest Larry C

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