Its no longer a secret (if it ever really was) that most people who win homes from HGTV shows like “Dream Home” cant really afford to see their dream come true, but that certainly doesnt dissuade other dreamers. The 2022 “Dream Home” winner, Karey Wolstenholm, was selected from more than 142 million entries, up from 2.5 million in 1998, the shows first year. And so far Wolstenholm is still living in her dream home, but most arent.
In fact, its 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. All the strategies for paying such a tax bill — selling a current home, getting a mortgage on the new property, paying the taxes from savings, etc. — probably require a level of affluence thats beyond the average contestant. A few stubbornly try to make it work, but more fold pretty quickly and put their dream home on the market. Most, having faced the facts early on, take the cash option and never spend a single night as the owner of the dream house.
You could argue that this is for the best. The TV show is a fantasy, after all, and maybe living out our wildest dreams isnt the most practical outcome. Its not that we dont deserve the big beach home. Its that we might not be able to transpose the typical middle-class juggling act onto the extravagance of a $2 million home with a world-class view. Fortunately, theres an easy alternative.
When Susan OGorman won the “Dream Home” contest in 2020, it seemed tailor-made for her family. The house was located on Hilton Head Island, South Carolina, where her family had frequently vacationed, according to The Atlanta Journal-Constitution. But not long after the announcement episode aired, OGorman decided to take the cash option outlined in the HGTV sweepstakes rules, never taking possession of the house at all. Some contestants try to keep their homes, some sell them within a few years, but more are taking the cash option instead. According to HGTVs official sweepstakes rules, the 2023 cash option is $750,000, accepted in lieu of the house and its contents. The winner also gets the vehicle and cash prizes, usually a nice car, and $100,000 to 250,000. For the 2023 contest, the total approximate retail value (ARV) of the awards, including the house, is $2,550,092; the ARV of the prizes for the cash option is $925,120.
The cash option isnt just for multi-million-dollar homes, either. HGTVs “Smart Home” and “Urban Oasis” giveaways also have a cash option, and at a glance, it looks like as many as half of the winners end up cashing out in advance. If users cant afford the much cheaper smart homes and Urban Oasis properties, theres no reason to suspect they could afford homes that cost two to three times as much.
So what are all the expenses associated with winning a dream home? The sweepstakes rules list of stuff HGTV wont be responsible for is instructive. It includes real estate transfer taxes, closing costs, insurance costs, deed recording charges, and any other costs related to purchasing and receiving a home.
In lieu of taking title to the HGTV Dream Home 2024 (and the contents of the HGTV Dream Home), the grand prize winner could opt for the “cash option” or $650,000 in cash.
Kathi Nakao’s Dream Home in 2004
If Don Cruzs 2005 “Dream Home” looked like a motte-and-bailey castle, the 2004 house instantly reminds one of a medieval coastal fort. It is at once odd and perfect. It features both an Italianate cupola and widows walk, but on separate vertical structures instead of combined, as is the convention. In an NPR interview, poet and critic John Ciardi pointed out that the widows walk was probably not meant for wives watching for returning sailor husbands, but for putting out chimney fires. But the St. Marys, Georgia, “Dream Home” does look like it has incorporated a couple of lookout towers. Indeed, one could be forgiven for thinking it looks a bit like an air traffic control or prison guard tower. For all that, the home is lovely and clearly luxurious, which perhaps alerted 2004 winner Kathi Nakao to potentially stormy financial waters.
The retirees enjoyed the property for over a year, but Nakao told The Press Democrat that she knew within the first day that they wouldnt be able to keep the home. Ultimately, she sold it after only 18 months of ownership. But a plan developed that brought some of the glamour and luxury of the dream back to their existing home. With the proceeds from the “Dream Home” sale, the couple intentionally renovated their old house to incorporate design flourishes from the St. Marys house, including using some of the actual furniture they had won.
“I enjoyed every minute of it,” Nakao told The Press Democrat. “It was my lottery, my chance. I would hope everyone in the world would have a chance to feel like I did.”
John Groszkiewicz’s Dream Home in 2003
When John Groszkiewicz won a $1 million Dream Home in 2003, he and his family made a go of it. “Id hate to make a decision to sell the house, then go down there and fall in love with it,” he told the Pittsburgh Post-Gazette. “Im kinda in love with it already.” HGTV likened the 2,800-square-foot waterfront house to a “tropical camp compound” featuring indoor/outdoor living spaces and spectacular views. The houses architect, Randy Johnson, was going for something unique. “Its a Dream House in the way it lives,” he said. “Its not gold faucets that make a Dream House. Its deeper. Its not a financial dream, its a spiritual dream” (via HGTV).
But what Groszkiewicz ended up realizing was the financial dream. After a few months of visits to the home, they faced fiscal facts and decided to sell it for $800,000, which enabled them to move 11 miles down to a bigger house. As it would be for many, this was plenty of dream for Groszkiewicz, his wife, and their four children. His wife was able to become a stay-at-home mom, and they paid off all their debt. “Our vision of the dream is that it enables you to do what you want to do,” HGTV spokeswoman Emily Yarborough said. Like Cruz, Groszkiewicz still enters the “Dream Home” sweepstakes each year.
After selling the house, the couple was audited twice by the IRS. The second audit resulted in the IRS owing Groszkiewicz 18 cents … somewhat different from Don Cruzs experience.
Why Winning the HGTV Dream Home is a Financial Nightmare
FAQ
Can you sell the house you won from HGTV?
What taxes do you have to pay if you win the HGTV Dream Home?
What disqualifies you from HGTV Dream Home?
Is it possible to keep HGTV Dream Home?
What is the HGTV Dream Home cash option?
That’s when the cash option comes in. If you’re the lucky winner of the HGTV Dream Home, you have the option to take the cash prize instead of the home. This means you can still win the HGTV Dream Home and still get a large cash prize. The cash prize is typically 75% of the appraised value of the home.
What happens if you win the HGTV Dream Home?
If you’re the lucky winner of the HGTV Dream Home, you have the option to take the cash prize instead of the home. This means you can still win the HGTV Dream Home and still get a large cash prize. The cash prize is typically 75% of the appraised value of the home. This means if the home is appraised at $500,000, the cash prize would be $375,000.
What is the HGTV Dream Home Giveaway?
The HGTV Dream Home Giveaway is an annual sweepstakes that awards a fully furnished home to one lucky person. Each year, a different home is featured in a different location. Along with the home, the winner also gets the home’s furnishings, plus a hefty cash prize. The cash prize is usually in the range of $250,000 to $1 million.
What happens if you win HGTV’s Million-Dollar Dream Home Giveaway?
Winning HGTV’s annual million-dollar dream home giveaway is like the lottery. There are many entries, few winners, and two options when accepting a prize. In the case of HGTV’s million-dollar dream home giveaway, winners can either accept the cash prize or opt for the house.