I am going to win a $1.5 Million Show Home or $1.25 Million Cash in a lottery - Which one should I take?
Just some background info.
If I took the cash I was thinking of buying some houses, renovate and sell (rinse and repeat).
If I took the house I was thinking of just selling it straight away.
Anyone got any other ideas?
Going to win because the power of positive thinking will surely tilt the scales in my favour.
Is this like one of those Nigerian emails?
I'd take the money
Cash no question - way more flexibility.
http://mslottery.com.au/Sold-Out/
$100 tickets, sells out super quick - already sold out ( maybe just WA )
i have a ticket, so you have check what 2nd prize is jondowy ;-)
Kinda neat that the home comes fully furnished and decked out
Take the house. Sell it. Keep the furniture I was thinking.
For me, it would be the house any day of the week.
As you can rent it, for an income and borrow against the house for more cash to get your second house, all the while your original house gets capital growth
That is a good idea. Using the equity in the house to buy a couple of cheap investment properties. Will need to read up about it a bit more as I am unfamiliar with how equity works.
http://www.passgo.com.au/blog/25-mortgage-broker-canberra-bl…
Good to have a read of gearing. Will give you an understanding of how equity can be used. Tailored to the individual of course
meh, you should just win the $20M oz lotto instead of choosing a measly show home.
Take the one with the big pink bow around it.
cash - then you can diversify - but there is the risk that you'll get caught up in the lottery excitement and burn it all!
house could be cool - stream of income from rental, but costs to maintain…
Cash … why would you need a 1.5 million home when a 600k home can do just as well, and you can invest the other half.
Sorry, this is Ozbargain after all. :D
If I took the cash it should be tax free.
If I too the house and sold it, does anyone know if you have to pay tax on it?
Depends on whether you live in it. If you live in it for a reasonable amount of time then sell, you claim the CGT main residence exemption. If you treat it as investment purposes, your sale would fall under CGT Event A1, but you may be able to claim the CGT discount of 50% provided you hold it for a period "at risk" greater than 12 months.
If you stuck $1.25 million in the bank for a year at 4% interest you'll end up with $1.3 Million at the end of the year.
If you took the house and had it as your main residence and sold it at the end of the year, even if you sold it below its market value of $1.4 million, you would still be better off.
So, isn't that a better option then taking the cash? Do a bit more work but should get more money out of it?
I believe prizes are exempt from CGT, but someone else may be better placed to tell you if a CGT event occurs when you sell that prize. It is certainly something to look into, as if you have to pay CGT on it, even with a 50% discount - it is not worth it.
You also need to take into account the costs involved in having a property (Rates, Insurance, Repairs, etc) and the costs involved in selling that property (Agent fees, Solicitors fees, etc)
The easier life is the cash.
The cash would be classified as a windfall/gain, being exempt from tax for assessment purposes, pretty much no doubt about it.
The question OP had referred to taking the house and if he sold it, whether that would be assessable.
$1.25M cash is a no brainer. Buy your own home and then start up your own investment portfolio.
Sorry I don't know much about Perth. Is the house in a prime location or in the middle of nowhere? It claims to be worth $1.5m, but is it really the case? You might want to do some research on it. On the other hand $1.25m cash in the bank is always valued at $1.25m.
That's true. It's about 30 minutes outside the city near the beach in a suburb called Hillarys.
http://www.realestate.com.au/neighbourhoods/hillarys-6025-wa
$1.5 million might be asking for a bit considering the link above.
I was going to buy a ticket in that lottery but the tickets sold out so very quickly! MS research/support is a good cause to support, even if you don't win the prizes.
Personally I'd take the money. As nice as Hillary's is, I don't want to live there and $1.25M would get a nice modest place closer to town with change to spare.
Take the cash. They always overstate the 'value' of prize homes, and the agents fees when it comes time to sell will eat up any extra value anyway.
What competition is this? Or what kind of giveway is this? I might try my luck in the future.
@johndowy the choice is simple!
Buy the house and if you really need money, sell it! That way you get more money :D
anyone win anything. i didnt :(
You have won? or are going to win?