Win a House in Spain for 5 €
A Real Estate Lottery is now possible in Spain. Although the concept has been well-known in the UK since some years ago, Spain is just taking its first steps in this kind of raffle.
The concept is simple. An owner who wants to sell a property decides to raffle it in exchange for the sale of lottery tickets. From the owner’s point of view, this is a risky decision that can be very profitable.
The platforms that manage these property raffles usually state a total value of tickets equal to five times the market value of the property. This means that if you manage to sell all of the tickets, you will get five times more than the property’s value, and the buyer will also be happy. The risk is obvious. If you do not manage to sell enough tickets and someone wins the raffle, you will lose the property, getting much less money than if you would have sold it in the real estate market.
In some platforms the raffle only includes the sold numbers, while others include all of them. If the raffle includes all of the numbers, even the ones that were not sold, chances are that the prize will go to a non-sold number, and the owner can keep the money raised by the raffle, plus the property. That would be a great business, right?
In summary, you are making a bet in which you can win or lose.
For the gamblers, the chance of getting a property for just five euros is very attractive. However, these lotteries also have their downsides. Typically, gamblers are not allowed to visit the house. The platforms should usually check that the property is in good condition, but one could prefer to pay a visit himself. Also, there is a big issue with taxes. Gambling taxes are high, and winning a property as a prize in Spain will increase your work income. This means that you will likely get your tax rate increased up to 45 percent due to your income increase.
So in addition to the lottery ticket, in case of winning, you may need to pay 45 percent of the property value when you receive it. In most cases that should not be a problem, since if you have regular income and the property is well rated, banks should be willing to offer a mortgage for the 45 percent of the value. However, if the winner does not have work or regular income, then he or she could have issues to find the funds to pay the taxes. If you are interested, some Spanish platforms are Lotohome and Sesortea.