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The Trouble v Those ‘Win a House’ Essay Contests

Written byJim AdairPosted top top Monday, 02 September 2019 05:00
Realty time The Trouble through Those ‘Win a House’ Essay Contests

An Alberta woman who recently revitalized the old “write one essay, victory a house” idea failed come get sufficient entries to finish the contest. The idea sounds great but most contests don’t work and also even effective contests could an outcome in taxation headaches.

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It’s one idea that’s to be tried numerous times over the years in Canada: run an essay contest that provides your residence as the optimal prize. You collection an entry fee from everyone who enters the contest, which allows you to dispose of a home that you to be unable come sell.

Trouble is, i was unable to uncover one of these contests in Canada that had actually a successful outcome.

The most recent flurry of contests started this year as soon as Alla Wagner that Millarville, Alta. Hosted one for a home she valued in ~ $1.7 million. Like many of this contests, contestants were asked for to write an essay explaining why lock deserved to victory the house and also send it together with a $25 entry fee. The fee would certainly not be reverted if a winner to be chosen, but Wagner said a minimum that 68,000 entries would certainly be required. Later she dropped the number come 60,000.

But by the time the contest concerned an end, only 4,627 entries had actually come in, according to the Calgary Herald. Wagner is currently in the process of refunding all the entry fees, much less a small service fee to cover her expenses.

At least the contest got that far. In 2004, a comparable contest in grand Prairie, Alta. Offered a hotel valued at $1.5 million as a cool prize, through entry fees collection at $1,000. But shortly after the dispute was launched, Alberta righteousness shut the down, deeming that to it is in an illegal lottery. In the 1990s at least two other comparable contests in Ontario to be shut under by the Ontario Provincial Police.

For Wagner’s contest, the Alberta Gaming, Liquor and also Cannabis (AGLC) firm launched an examination by a team that included AGLC investigators, two RCMP members and also a member from each of the Calgary and also Edmonton police services, reports the Toronto Star. The investigators break up that because the essay was no a game of chance, yet would it is in judged on the merits of the entries, that wasn’t a lottery and also was permitted to walk ahead.

Though often touted together a unique new idea, this contests seem to date back to the 1996 move The Spitfire Grill, in i beg your pardon an essay dispute was featured.

Wagner’s challenge received several enthusiastic media coverage, with plenty of stories stating that she was “giving away” her home – but that was just if she built up the $1.5 million in entrance fees.

The publicity because that Wagner’s dispute failed to an outcome in sufficient entries, but it did inspire several an ext people to launch contests of your own. In every case, it appears the homeowners tried to offer their homes using timeless means, but when they might not acquire the money castle wanted, they chose to try a contest.

Ivan and also Marsha Negrych room hoping the 17,000 civilization will send a 500-word essay and also $100 come them by Oct. 31, 2019. The compensation is a bed and also breakfast in Cardston, Alta. That has been designated as an Alberta historic Resource. The original log cabin, constructed in 1889, was broadly renovated and expanded native 1913 to 1929. It has hardwoods from all over the world, complex ceiling tiles and also stained glass imported indigenous Italy.

Ivan said the CBC the the bed and also breakfast was on the industry for much more than a year prior to he heard around Wagner’s contest and decided to try something similar.

You could likewise enter a challenge to win a 40-acre property close to Sherwood Park, Alta. This one has actually a $250 entry fee. The dispute was to close on Aug. 31, 2019 however as the Aug. 28, just 61 of the 2,500 required entries had actually been submitted. That contest is most likely to obtain a six-month extension.

Or, you could go because that a 4,400-square-foot mansion in Calgary. The website because that this challenge outlines just how the owners, Teresa and Bill, designed and built your dream residence in the Mount royal neighbourhood in 2014. But the residence was constructed “against an increasingly dark and ominous background in the province of Alberta,” states the dispute website. “For Teresa and Bill, the octopus on the building and construction bill that $2.9 million had barely dried as the City of Calgary issued their home value assessment of $1.6 million. The stage had been collection for a financially disastrous crisis. Through no possible sale at cost recover levels and also poor prospects for waiting the end the market, this couple is struggling v a mountain of debt.”

The website states the contest “was born from the must think external the box.”

It needs a minimum of 100,000 civilization to sign up with the contest by sending out $35 together with a an excellent photo of your pet. The owners hope to have the ability to grant three runner-up prizes that $50,000 as well as give $100,000 come share amongst three Canadian charities.

Even if a contest is successful, it can create tax worries for the homeowners, claims Carolyn Hogan of müller Thomson LLP in Calgary. Generally, as soon as a human being sells their major residence in Canada, it’s tax-free. Yet can entry fees for a dispute be considered proceeds the the disposition of a property? Hogan claims that because most that those fees come from people who will not get anything in exchange for the money, those fees might not it is in considered part of the revenue price the the property.

In the situation of Alla Wagner, because that example, if the entry fees were identified to it is in taxable company income and Wagner had actually reached the score of 60,000 entries or $1.5 million, she might have been liable for earnings tax of as much as $720,000 not consisting of expenses, states Hogan.

If the winner that the residence was can not to live in the property and also claim it as their major residence, and then marketed it, they would certainly incur a taxable capital gain on the entire value of the property, not on the boost in value because they acquired it, Hogan writes.

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Getting sufficient entries to make the contests viable seems to it is in the biggest hurdle to this contests. In the U.S., which has seen numerous of this contests end the years, the Washington State Gambling Commission claims they “may sound like a succinct idea, but we don’t understand of any kind of houses that have actually been offered away in Washington. Generally there aren’t sufficient contestants come pay because that the house, for this reason the challenge is cancelled or postponed to allow for an ext entries.”

It claims if you space thinking that entering such a contest, make sure the human running it actually owns the property and also that the location and characteristics of the property are being appropriately represented. If the challenge is cancelled, find out how much of the entrance fee will be refunded.