I thought you may like to know what NC Laws says on Raffling off houses.
By Charlene D. Moody, Deputy Legal Counsel
The Real Estate Commission often gets calls from licensees and homeowners seeking alternative ways to bring about sales. One such method suggested by callers is to raffle a home. The seller would sell raffle tickets, the winning ticket-holder would receive the property, and the seller would receive the proceeds.
In the past, the answer was clear that under North Carolina law, no real estate could be offered as a raffle prize under any circumstance. However, in May 2009, the NC General Assembly amended N.C.G.S. 14-309.15 to allow real property to be offered as a prize in a raffle by certain organizations.
The maximum appraised value of the real property to be raffled is $500,000. for any one prize and the total appraised value of all real estate prizes offered by one nonprofit organization may bot exceed $500,000 in any one calendar year.
Licensees must note that the statue authorizes ONLY nonprofit organizations or government entities to conduct raffles.
Sellers might ask if they would qualify if they donated a portion of the raffle proceeds to a charity. However, the statute provides that the proceeds of the raffle may not be used to compensate any person to conduct a raffle. The Commission, therefore, takes the position that the seller may not receive any part of the raffle proceeds nor may a licensee receive any fee or commission from the raffle proceeds.
A person conducting a raffle in violation of N.C.G.S. 14-309.15 shall be guilty of Class 2 misdemeanor.
Additionally. licensees and the public should be aware that there may be surprising tax consequences of winning a real estate raffle. Licensees should advise any participant in such a raffle to consult a taz advisor concerning the tax consequences to the winner. For example, in the current tax year, the home amy be reportable as ordinary income, leading to a large income tax bill.
Further, when the winner decides to sell the home, he or she may encounter a large capital gains tax because the cost basis for the home will be the ticket price rather than the value of the home.
Make it a great day!
Jodi Neal - Realtor/Broker Lake Lure, NC - Keller Williams Realty Mountain Partners - 828-980-2211 cell - 828-625-8326 Home Office.
Comments(2)