Nowadays, it seems like the Real Estate Bubble keeps growing. Prices in big cities have reached unforeseen levels. Until it pops, it will remain quite hard to purchase a home in big cities for the middle and lower class. Fortunately, house raffles give you the opportunity to climb the property ladder without worrying about a 30-year mortgage. Indeed, with tickets at a price of £2, you have the chance to win a house. As people are having issues to purchase, it will get harder for owners to get rid of their homes with a profit. This is the reason why house raffles and prize competitions are great because they also offer homeowners the opportunity to give their house away in a fun and profitable manner. This article will help you organize your own raffle through tips and instructions.

Table of Content:

  • Are House Raffles and Prize Competitions Legal in the UK?
  • What is the Difference Between a House Raffle and a Prize Competition?
  • Why do House Raffles Spark Interest in People?
  • Who Covers the Taxes when an Individual Wins a House?
  • How Can Cloverhut Help You Successfully Run Your House Raffle?

Are House Raffles and Prize Competitions Legal in the United Kingdom?

In 2021, house raffles and prize competitions are entirely legal. There are authority figures in the country such as the Gambling Commission, that set the rules so as to avoid fraudulent practices. There have been some problems with raffles in the past because some organizers saw them as an opportunity to scam people. A lot of people, with the goal in mind of becoming homeowners for a few pounds were left with nothing. Scammers took the money and left without giving the prize. The positive image of house raffles took a hit due to such malicious practices but, the Gambling Commission has been busy regulating such competitions to make sure it never happens again.



What is the Difference Between a House Raffle and a Prize Competition?

Indeed, there is small difference between house raffles and prize competitions. Even though they both intend to give out fantastic prizes to lucky winners, they still differ from each other regarding what they do with the profits. In fact, house raffles and lotteries in the UK are allowed only for charitable purposes or other types of non-for-profit causes. If you have seen companies organize raffles and lotteries for profit, it might have been illegal unless they organized a free draw or a prize competition.

In contrast to lotteries and raffles where the outcome depends on luck, the outcome of prize competitions must be determined by the skills, knowledge, or judgement of the participants. These can be organized to make money. As an individual organizer, this is what you are looking for. You must create a prize competition to sell a house and make a high return on investment without breaking the law.

 If you are not sure of what you are doing to make sure to seek legal advice. You do not want to organize an illegal raffle and have all the money refunded. The Gambling Commission stipulates that: “The element of skill, knowledge or judgment in a competition must prevent:

  • a significant proportion of people from taking part or
  • significant proportion of people who do take part from receiving a prize.”

Free draws on the other hand, can also be organized for profit. However, there must be a free entry option online or by post incurring a reasonable price for the participant. You will find more information about free draws, lotteries, and prize competitions here.

Why Do House Raffles Spark Interest in People?

As you know, the benefits of holding or taking part in a house competition are great.

You can win a house for a couple pounds or make a 30% profit on your home without someone having to front the whole cost out of their own money. It sounds like the perfect win-win situation for the buyer and seller. Raffles are great and can be exciting as well. It is believed to be a new fun alternative to traditional real estate in which people advertise their home through agencies and wait a couple months for a buyer.

A lot of people that already own a house participate in these competitions to win a vacation home or to list their prize on Airbnb to generate passive income. Whether your house is expensive or not, there will always be people interested in owning it through the competition. Houses are a great way to build equity to pass on to future generations.


Who Covers the Taxes of the Winner?

Taxes are generally a hard subject to understand. In most countries around the globe, there is a tax that has to be paid every time a good or service is exchanged. It is no different with house sales in the United Kingdom. If you were to liquidate your personal house through a house raffle, free draw or prize competition, you would probably have to cover your own taxes and so does the winner of your estate. Most people that enter competitions do not expect to pay taxes and probably cannot afford them. A lot of prizes on television shows are unclaimed as winners are hit with exorbitant taxes. Would you collect your new house if you had to pay an additional £50,000? The answer is no. House raffles should give people the opportunity to become homeowners for very little money. Not for £50,000. This is the reason why a lot of people do not collect their prizes. Having said that, as organizers are obliged to deliver the prize, a lot of them end up paying the winner’s taxes.

How Can Cloverhut Help You Run Your Prize Competition or Raffle?

Cloverhut is a prize competition company that focuses on raffling off houses. We can be very useful to you as we take care of everything, so you do not have to worry. That includes evaluating your home, organizing the raffle, advertising the raffle, etc. We make sure that the prize competition complies with the law and the Gambling Act of 2005. For more information about what it takes for us to help you raffle your home, you can contact us or check out our website. Cloverhut is an outstanding company to work with as we only win if you win.

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