Once-homeless family wins dream home
Now the Georgia couple must pay a big tax bill to take possession of their prize property.
Hope and Don Lance once struggled just to stay off the streets. Now the Macon, Ga., couple are the owners of a brand new five-bedroom, four-bath home. But it remains unclear whether they will ever be able to move in.
The Lances, who have lived in motels and, for a time, in a tent, won the home in a St. Jude Dream Home Giveaway, one of a number of similar fund-raising raffles operated by non-profits across the country. St. Jude alone runs dream home raffles in 15 states, selling $100 tickets to benefit its children’s hospital in Memphis, Tenn.
But winners need to pay state and federal income taxes on the prize before they can take possession of the home, a fact spelled out in at the St. Jude Dream Home Giveaway FAQ. In the case of the Lances, the bill could come to more than $100,000.
The Lances, who have a toddler girl named Faith, seem dazzled by their sudden change in fortune. The master bedroom of their new home is nearly as big as the one-bedroom apartment in downtown Macon where the family now lives, Hope told the Macon Telegraph.
But now she and her husband need to contemplate whether to move to the $350,000, 3,250-square-foot home they won in the nearby town of Warner Robins.
Don, who works installing audio equipment, had a strong intuition that he should buy a ticket for the raffle after hearing about it on on television, according to the Telegraph.
"I woke up and something inside (me) said, 'You have to buy one of those tickets.' If I win, fine. If I lose, we help these kids,” Lance told the newspaper.
At first, his wife said she “kinda blew him off,” But Don insisted and his wife bought the ticket just three days before the drawing.
Don and his wife were returning home from Atlanta Sunday when his boss called to say that his name was being announced on TV as the winner of the St. Jude home giveaway.
"I made him pull over," his wife told the paper. "We just sat there for 30 minutes. We couldn't believe it."
The tax implications are the only hitch.
In a similar case, KTVB.com in Boise, Idaho, wrote in 2009 about a couple who'd won a St. Jude home and faced a bill of nearly $110,000 for state and federal taxes on their winnings.
Another winner, living in the Colorado town of Lakewood, faced a similar predicament in 2011, according to Viva Colorado, the Denver Post's English-Spanish news site. Yadira Estrada won a half-million-dollar St. Jude's giveaway home in a more-expensive town about 40 minutes from her job, family and friends. Her property taxes alone on the new home would be about $4,000, the Post estimated.
MSN Money was not able to reach the Lances. "We work closely with winners as they make determinations about payment of the required taxes," St. Jude's spokeswoman Jennifer Haslip, said by email.
"In the past 20 years, only one winner was unable to pay the taxes or get a mortgage to pay the taxes. In that case, we worked with the winner to resolve it through the sale of the property," Haslip said, adding that she didn't yet know what the Lances will do with their new home.
Certified financial planner Al Woodward told the Denver website that a costly dream home may not necessarily be appropriate for all winners.
He said if winners of such a costly home can first afford to pay the property taxes and move into the house, the second hurdle is being able to maintain the home.
"Are they going to be able to pay the utilities or have time to mow the lawn?" he said. "Or are they going to have to work three jobs just to keep the home?"
He suggested that builders construct smaller, more-affordable homes for the raffles.
More from MSN Money:
- Home equity loans make quiet comeback
- Mortgage lenders on hot seat again
- 20 cities where it pays to buy a rental
- Are you insured against a landslide?
They need to work with the group that raffled the house to sell it and get whatever proceeds are left, after taxes, in cash so that they can buy a more affordable house. They will still come out ahead.
They should only pay the tax for the cost of the ticket. They bought the ticket not the house.
My thoughts are exactly the same as JayRan. They absolutely should sell it. Wishing them all the luck
in the process of selling it!
The answer was no, so I sold it. I think it's a good rule.
I'm sick of political BS. Of course they would be expected to pay property taxes on the house. I was so happy to see people who needed a break get one and then I read this. I hope it all works out for them and that they can feel good about the life that they're providing for their little girl.
Yes but with a program such as that one................... buy a ticket for $100.00 get a chance to win a home............. that is a great opportunity. Just make it doable people!!
Refinance the house.. only need the taxes, not the full value of the house. 30 year mortgage for 100k is $500 a month, maybe less depending on their credit. I am sure their rent was that much if not more. Then they have to deal with upkeep and utilities, etc. This isnt a tragedy... jessh
in this case, they didn't buy it but again, a house they can't afford.
Copyright © 2013 Microsoft. All rights reserved.
ABOUT SMART SPENDING
LATEST BLOG POSTS
Joe Cantrell says he faces charges after trying to take advantage of the retailer's policy.