Raffling a house

whisky_galore

What's the deal with so many of them getting raffled these days?

How are these organisations getting their mitts on them in the teeth of a housing crisis? Isn't it odd?

Organise raffle. Don't reach the money you want. Don't give away the house but give most of the money raised as the prize. Keep the remainder of the money as profit(and the house). Gullible people will buy a ticket if a house is the prize where they wouldnt buy a ticket if the prize was a 100 000 eurp cash

Donald Trump

Are they legal?

I remember that, technically speaking, back in the day, you were supposed to get a permit from the local barracks to have a raffle

What is the tax liability of the winner? Treated as a gift?

Trigger Happy

People don't read the small print when buying these tickets. As said above- the organizer can set a fundraising limit that if not met results in some of the money getting distributed in prizes...minus the organizers admin fee...which makes it a no lose situation for the organizer.

And in the smaller print... "If the host fails to provide a prize, the winners will receive a share of the compensation amounting to 75% of all ticket sales."

Wanderer78

https://www.boards.ie/discussion/comment/118236829#Comment_118236829

...or maybe these buyers are just desperate for a home!

Gregor Samsa

I think there's two sides to this phenomenon.

The first is the fundraising one. Clare GAA have one going on at the moment (https://winahouseinlahinch.com/terms-and-conditions/). It states that they were issued a licence for it from Ennis District Court, so that part is above board. Buying a ticket for it makes you a temporary social member of Clare GAA, so legally it's a private membership raffle. It should be noted that neither the GAA, their county boards or clubs are registered charities - they're "not for profit organisations". The house they're raffling hasn't been built yet, and Clare GAA doesn't own it - they've entered into an agreement with the builders to raffle the house for them- perhaps that agreement is based upon the builders getting more than the market value for the house, and Clare GAA getting the rest. They have a cap on the tickets (25,000), at €100 a pop.

On the other side, some private house sellers are looking to raffles generate much larger returns than selling on the open market would. In these cases, the person who owns the house contracts a specialist company to organise the raffle, who gets 10% of the proceeds no matter what. If there's enough tickets sold to cover an amount set at comfortably more than the value of the house, the house owner gets the other 90%. If there isn't enough tickets sold to cover the cost of the house, the company organising it still gets their 10%, the raffle winner gets the remaining 90% cash (which, by definition is less than the value of the house), and the home owner gets nothing, but they still have the house and it didn't cost them anything.

You'd pretty much have to use a specialist company to do the raffle for you. Trying to organise a raffle where you sell 10,000 tickets by yourself at €50 a pop would be pretty much impossible, unless you had a massive social media reach and you were willing and able to pretty much promote it full time. It's not something that you'd be able to do with your 150 Facebook friends.

As to whether the company running the raffle has the necessary licence, well, that depends. Like many other things, I'm not sure how much that's enforced here.

In the UK, where this has been going on for longer than here, the majority of house raffles end up with the house not going to the winner, either because the raffle gets shut down for not having a licence, or because it doesn't sell enough tickets.

Research by house raffle platform, Winmydreamhome.com, reveals that, while the property raffle sector is enjoying increased popularity, the prize home is only awarded to a winner 19% of the time. (https://www.walesonline.co.uk/news/homes-property/property-news/warning-over-house-raffles-offer-20763458)

It's one thing for someone who just wants to contribute to their local GAA club or whatever throwing €100 into the pot, and not having any real expectation of winning. The danger is that people really hunting for a house will "invest" (read: waste) their money on multiple expensive raffle tickets - the majority of whom will never win. There's also the issue of scarce housing stock being taken up by these raffles, and being put out of reach to people who just want to buy a house the legitimate way. But the biggest danger is the age old one of being scammed - thousands of people handing over cash to some random outfit in the hope of winning big, and the money being pocketed and no-one every hearing from them again. And I guess that one depends on who's doing the raffling.

As for the tax situation if you won a house, "winnings from betting, lotteries or games with prizes" are exempt from Capital Acquisitions Tax: https://www.revenue.ie/en/gains-gifts-and-inheritance/cat-exemptions/exemption-of-certain-receipts/index.aspx

whisky_galore

Thanks, the explosion of raffled houses seemed a bit strange to me in the current times.

I was aware of homeowners doing it, but the other day I drove past some hoardings for community groups doing raffles and it was nearly every second one was a house or purported house, it used be just hampers and cars.