Raffle offers allure of
Santa Barbara home ownership
This Drawing Occured in 2003!!!
it was put on by This drawing was through the Santa Barbara Contemporary Arts forum http://www.sbcaf.org/ You can call them at 805.966.5373 or Fax 805.962.1421
Winner in fall drawing can take $1 M in cash instead
The median home price on the South Coast has hit a record $1 million, but it is possible to buy a house worth that much for the price of a dinner-date at Citronelle.
Taking a cue from cultural groups around the country, the nonprofit Santa Barbara Contemporary Arts Forum is raffling off a home near downtown Santa Barbara to raise money for its various programs. Tickets are $150.
At a time when people are leaving the area to realize the dream of home ownership, this is one way to grab it right here for a little bit of money.
Eighteen thousand tickets are being offered and the drawing is set for 3p.m. Sept 4 2003 Alameda Park.
If I win, you'll read it here first.
Spokeswoman Susan Goggin said the raffle will help the 26-year-old. Contemporary Arts Forum, located upstairs in the center court of Paseo Nuevo, turn a corner in its goals to educate, and showcase fine art work.
"It's small but mighty, because it's brought in some international artists and received international recognition," she said. "But it's always lived on bare-bones budget. They constantly have to go after $1,000 grants, $5,000 if they're lucky. This is really their way to get some firm footing."
Organizers won't divulge the address of the raffle home, valued at $1.25 million, but they will say its Architecture is Spanish Mediterranean and it was built as a. single-family home in the 1920s. It has three bedrooms, one of which has been converted into a den, and is part of an eight-unit homeowners association.
Tickets purchased by July 5 are eligible for two early bird drawings totaling $50,000 with the winners being put back in the drawing for the grand prize. The big winner will be able to tour the house before deciding if it's his or her dream home, or whether the $1 million cash option is the way to go.
If you can't pony up the entire cost of a ticket, up to three people can pitch in but you'll have to share the winnings.
"The odds are really quite phenomenal," said Ms. Goggin. "It's like, "Do l want a massage? Do l want to play that round of golf? It's just amazing that a ticket costs the same as so many other things that come and go so quickly."
Contemporary Arts Forum isn't the first nonprofit organization to go for the big bucks by giving away a house, and it isn't the first in California to offer a house close to the Pacific Ocean. The Palos Verdes Art Center has held two "dream home" giveaways: This year's grand prize was a $1.3 million Palos Verdes estate or $1,000,000 cash; last year's grand prize winner had the choice of a $1.1 million Palos Verdes estate or $800,000 cash.
"The first time, they took the cash. This year's winners opted for the house," said Ann Willens, administrative director of the Palos Verdes Art Center.
Running a dream home raffle is no small task First you have to find the house, then you have to buy it. Next comes the 60 or so pages of state Attorney General's raffle guidelines that have to be followed to the letter.
Then you have to sell enough tickets to cover your costs and, hopefully, make a little extra cash.
"This year, we sold out 18,000 tickets in 34 days. Last year we sold out in 65 days," said Ms. Willens. "There's a certain amount of panache to Palos Verdes, or at least to ocean views.
And how well did they do?
We netted a million this, said Ms. Willens.
Before the dream home raffles, she added, bringing in that much might have taken 10 years. "We are very successful at what we do anyway, but this certainly helps. Any words of advice for Contemporary Arts Forum?"
"We wish everybody the absolute best," said Ms. Willens.
As in any raffle, the number of tickets sold determines the odds of winning. If the Contemporary Arts Forum sells fewer than 15,000 tickets by August 3l, the drawings will be held as scheduled, but the house will be excluded. Instead, the grand prize winner and CAF will split the raffle's net proceeds.
If Palos Verdes is any indication, the CAF raffle will be a sellout.
The winner doesn't need to be on hand when the drawing takes place at the Alameda Park bandstand. "It'll be a party atmosphere and we're planning on music," said Ms. Goggin. "The final drawing will take place for prizes 2 through 180. There will be big cash awards leading up to the grand prize."
Assuming all tickets are sold, the chances of doubling your money are 1 in 100, organizers said. For 179 tickets holders, the only choice is how to spend the cash.
But what about the lucky ticket drawn as the grand prize winner? Taking home $1 million cash is quite tempting Then again, if the local housing market is any indication, todays million-dollar home could be worth much more tomorrow.
"If it were me, I'd probably take the house," said Harvey Lynn, a partner in MacFarlane Faletti & Co. LLP, certified public accountants. "Knowing what's happened in Santa Barbara these last few years, the house theoretically would appreciate quicker than the million dollars."
Then again, he added, you could take the cash and use it to buy some other house.
Either prize is going to have tax consequences.
California's graduated tax rate starts at 1 percent and goes to 9.3 percent; the fed's starts at 10 percent and tops out at 35 percent.
"For a person who had no income, they might pay combined state and federal taxes of 35 to 40 percent" said Mr. Lynn. "For a high-income person it would be in the low 40s."
In both cases, whether it's a student who really has no income or someone who's wealthy with a lot of income, most of that award is going to taxed at the highest rate."
How you pay the taxes will depend on which prize you choose. A person who takes the cash will simply have less of it once the taxes are paid.
"The only problem with taking the house is what you pay the taxes with?" said Mr. Lynn. "If the taxes are $300,000 to $400,000, they'd have to take out a loan."
And choosing the house also means property taxes.
Whichever prize the big winner chooses, it is possible to beat back the tax man a bit.
"If you want to minimize the overall tax effect," said Mr. Lynn, "it's possible that prepayment of a portion or all of the California tax would reduce the federal tax and overall give you a reduction in your combined taxes."
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