Interesting Long Shot Idea, Raffle Your Home, Maybe Not

I was looking for information on something else and came across this post. I have heard about raffles for a house before but this is the most recent.

A property over on the Oregon Coast was being raffled off. They tried to sell the property for $500,000. I guess they didn’t have much luck, so they decided to try a different technique.

For $300, people can buy a raffle ticket. They have to sell at least 3000 tickets or everyone get’s their money back.

I have heard long ago that raffles were illegal and now recall a Growing Pains episode where the oldest son got into trouble for raffling a bike or something. The cops came and hilarity ensued.

I made a couple of calls and was told that it is possible but rarely works. Now most of the stories we hear about are the million dollar homes where the raffles need far more people and high ticket prices.

What about a home that costs $250,000. What are the chances that you can get 2500 people to put up $100? 2500 X $100 = $250,000 on my calculator. Escrow fees would be about $1600.

You would need a lawyer to set it up with a contract stating a refund if the reserve amount of tickets is not sold.

Of course there would be taxes on the winning which could cause some problems when April 15th rolls around. Getting a $250,000 home for $100 could cause you to jump to a 33-35% tax bracket for federal taxes. Add on 9% or so for Oregon and you will be around 43%. (I am not a tax attorney as you already guessed.)

When you sell the home that same year to pay taxes won’t you get nailed again for the gain on your house? It is never as easy as you would hope.

Update on the raffle idea and taxes.