Won a Prize Home? Here's Exactly What Happens Next
Your complete guide to navigating the prize home winner journey, from that life-changing phone call to getting the keys to your new property.
Winning a prize home is a life-changing moment that only a handful of Australians experience each year. Whether you've just received that phone call or you're planning ahead for a potential win, understanding what happens next is crucial. This comprehensive guide walks you through every step of the prize home winner journey, helping you make informed decisions and avoid common pitfalls.
The Moment You Find Out
Most prize home winners receive the news via a phone call from the lottery organiser. This is typically followed by official notification through registered mail to confirm the win and outline the next steps. The process is designed to be secure and verifiable.
When you're selected as a prize home winner, the notification process follows a strict protocol. Major organisations like Mater Home Lottery, RSL Art Union, and Yourtown have established procedures to ensure winners are contacted securely and efficiently.
Phone Call
Initial contact is made by phone, usually within 24-48 hours of the draw. They'll verify your identity and ticket details.
Registered Mail
Official written confirmation follows, including winner declaration forms and information about the prize transfer process.
Legal Documentation
You'll receive detailed information about the property, settlement process, and what you need to do next.
Verification Process
Be prepared to provide proof of identity and your original ticket or ticket number. Legitimate lottery organisations will never ask for payment to claim your prize or request sensitive banking details over the phone. If you're unsure, hang up and call the organisation back on their official number.
Settlement and Handover Timeline
The settlement process for a prize home typically takes between two to four weeks from the official notification. This timeline allows for legal requirements to be met, documentation to be processed, and the property title to be transferred into your name.
Week 1
Documentation and verification, appointing your solicitor if needed
Week 2
Contract review, property inspection, arranging insurance
Week 3
Final legal checks, stamp duty arrangements, settlement preparation
Week 4
Settlement day, title transfer, key handover ceremony
The Legal Process
While the lottery organisation handles most of the heavy lifting, you'll need to engage with the legal process. Many winners choose to appoint a solicitor or conveyancer to review the transfer documentation, though this isn't always mandatory. The cost is typically a few hundred to a thousand dollars, but it provides peace of mind.
On settlement day, the property title is officially transferred to your name. You'll receive the keys, all relevant documentation, warranties for appliances and fixtures, and information about the property's utilities and body corporate (if applicable). Many lottery organisations arrange a special key handover ceremony with media present, though you can opt for a private transfer if preferred.
Tax Implications for Prize Home Winners
Good News: Prize Homes Are Tax-Free
In Australia, lottery winnings including prize homes are not subject to income tax. You won't pay any tax on the value of the home when you win it. This is one of the major advantages of winning a prize home compared to earning the equivalent amount through employment or business.
However, there are some financial considerations you need to be aware of. Understanding the complete tax picture helps you make informed decisions about whether to keep or sell your prize home. For more detailed information, check out our comprehensive guide to competition winnings and tax in Australia.
Stamp Duty
In most Australian states, stamp duty may apply when the property is transferred to your name. The amount varies by state and property value.
Some lottery organisations cover this cost, while others require the winner to pay. Always clarify this in the terms and conditions.
Capital Gains Tax
If you later sell the prize home for a profit, capital gains tax (CGT) may apply on the increase in value from when you won it.
If the home becomes your principal residence and you live in it, you may be exempt from CGT under the main residence exemption.
Land Tax
If the property isn't your principal residence, it may be subject to annual land tax depending on your state and the property's value.
Each state has different thresholds and rates. Check with your state revenue office for specific details.
Rental Income
If you choose to rent out the prize home, rental income is taxable and must be declared in your tax return.
You can claim deductions for property-related expenses such as maintenance, insurance, and property management fees.
Get Professional Advice
Every winner's situation is different. Before making any decisions about keeping or selling your prize home, consult with a qualified accountant or tax adviser who understands your personal financial circumstances. The investment in professional advice can save you thousands in the long run.
Keep It or Sell It? The Big Decision
This is the question every prize home winner faces. There's no universally correct answer because it depends on your personal circumstances, financial goals, and lifestyle preferences. Let's explore the pros and cons of each option.
Keep and Move In
Pros
- Live mortgage-free in your dream home
- No CGT if it's your main residence
- Build equity over time
- Usually comes fully furnished
Cons
- Ongoing costs (rates, insurance, utilities)
- Location may not suit your lifestyle
- May need to relocate for work/family
Sell Immediately
Pros
- Immediate cash in hand
- No ongoing property costs
- Flexibility to invest elsewhere
- Avoid property market risk
Cons
- Potential CGT on future value increase
- Miss out on property appreciation
- Real estate agent fees (2-3%)
Keep and Rent Out
Pros
- Regular rental income stream
- Property value appreciation
- Tax deductions on expenses
- Option to move in later
Cons
- Landlord responsibilities and risks
- Rental income is taxable
- Maintenance and management costs
Making Your Decision
Consider your current living situation, financial goals, and life stage. If you're renting and the prize home is in a suitable location, moving in could be ideal. If you already own a home you love or the prize home is in a different state, selling might make more sense. For those wanting passive income and long-term wealth building, renting it out is worth considering.
Many winners choose to wait a few months before deciding, giving themselves time to visit the property, research the local market, and consult with financial advisers. There's usually no requirement to make an immediate decision.
What's Included with Your Prize Home
One of the most appealing aspects of winning a prize home is that most come fully furnished and ready to move into. However, what's included can vary significantly between different lottery organisations and specific prize packages. Always check the terms and conditions for your particular draw.
Typically Included
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All Furniture: Sofas, beds, dining tables, chairs, and decorative items throughout the home
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White Goods: Refrigerator, dishwasher, washing machine, dryer, and oven
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Electronics: TVs, sound systems, and sometimes computers or tablets
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Outdoor Furniture: Patio sets, barbecues, and pool furniture where applicable
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Artwork and Decor: Paintings, mirrors, lamps, and decorative accessories
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Window Coverings: Blinds, curtains, or shutters
Usually Not Included
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Consumables: Food, cleaning products, toiletries, or personal items
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Ongoing Services: Electricity, gas, water, internet, or phone connections
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Garden Maintenance: Ongoing lawn mowing or pool cleaning services
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Insurance Policies: You'll need to arrange your own building and contents insurance
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Personal Effects: Clothing, books, or family photos shown in marketing images
Insurance and Ongoing Costs
Owning a prize home comes with ongoing financial responsibilities. Understanding these costs upfront helps you budget appropriately and avoid unpleasant surprises.
Building Insurance
You must arrange building insurance from the settlement date. This covers the structure against damage from fire, storms, and other insured events.
Expect: $1,500-$3,000 annually depending on location and features.
Contents Insurance
Covers all the furniture, appliances, and valuables included with the prize home. The value of contents often exceeds $100,000 in furnished prize homes.
Tip: Create a detailed inventory with photos for insurance purposes.
Body Corporate Fees
If your prize home is an apartment or townhouse in a complex, you'll pay quarterly body corporate fees for common area maintenance.
Cost Range: $1,000 to $5,000+ per quarter depending on amenities.
Council Rates
Annual or quarterly council rates cover local government services like rubbish collection, water, and infrastructure maintenance.
Cost Range: Typically $2,000-$5,000 annually, varying by council area.
Real Winner Stories
Understanding what real winners chose to do with their prize homes can provide valuable perspective. Every winner's situation is unique, but these stories illustrate the different paths people take.
The Downsizers
A retired couple from Brisbane won a luxury apartment on the Gold Coast. They sold their family home, moved into the prize apartment, and used the proceeds from their old house to fund their retirement.
"It was perfect timing. We'd been thinking about downsizing anyway, and winning meant we could do it without financial stress."
The Immediate Seller
A young family in Sydney won a home in Melbourne. With established careers and children in school, relocating wasn't practical. They sold immediately and paid off their mortgage.
"We considered keeping it as an investment, but being mortgage-free in Sydney was too good to pass up."
The Investor
A Perth professional won a beachside property and chose to rent it out. The rental income covers all costs plus provides additional income, while the property appreciates in value.
"I saw it as a retirement asset. The rental income is fantastic, and in 10-15 years, I can move in or sell for a nice nest egg."
What Winners Typically Choose
Sell Immediately
Convert to cash for debt reduction or other investments
Keep and Move In
Make it their primary residence
Rent It Out
Generate passive income as an investment property
Common Mistakes Prize Home Winners Make
Not Getting Professional Financial Advice
Many winners make snap decisions without consulting accountants or financial planners. The tax implications, ongoing costs, and investment potential are complex.
Solution: Invest a few hundred dollars in professional advice before making any decisions. This consultation often pays for itself many times over.
Rushing to Sell Below Market Value
Some winners panic-sell to the first buyer who makes an offer, often accepting significantly less than the property's true value.
Solution: Get multiple independent valuations and market appraisals. Take time to find the right buyer at the right price.
Underestimating Ongoing Costs
Winners sometimes move in without budgeting for council rates, body corporate fees, insurance, and utilities, then struggle with cash flow.
Solution: Create a detailed annual cost breakdown before deciding to keep the property. Factor in all expenses to ensure it's financially sustainable.
Making Emotional Rather Than Financial Decisions
The excitement of winning can cloud judgment, leading to decisions based on emotion rather than sound financial planning.
Solution: Take a step back and evaluate the decision objectively. Consider your long-term financial goals and how this prize fits into them.
Frequently Asked Questions
Do I have to pay anything upfront to claim my prize home?
No. Legitimate prize home wins require no upfront payment to claim. The lottery organisation handles the property transfer. You may need to pay stamp duty depending on your state and the draw's terms, but this is arranged during settlement. Be extremely wary of anyone asking for payment to release your prize—this is a common scam.
Can I take cash instead of the prize home?
This depends on the specific lottery's terms and conditions. Some organisations offer a cash alternative option (usually around 70-80% of the home's value), while others require you to accept the property. If a cash option isn't explicitly mentioned in the T&Cs, you'll need to accept the home and sell it yourself if you prefer cash.
How long until I get the keys to my prize home?
Typically 2-4 weeks from official notification, though this can vary. The timeline depends on legal requirements, settlement processes, and state-specific regulations. Your lottery organisation will provide a clear timeline during the notification process.
Do I need to hire a solicitor or conveyancer?
While not always mandatory, it's highly recommended. A solicitor or conveyancer can review all documentation, ensure the transfer is legally sound, and protect your interests. The cost is usually $500-$1,500 and provides valuable peace of mind for such a significant asset.
What if the prize home is in a different state?
You still win the property regardless of location. Many winners live interstate from their prize homes. Your options include relocating, keeping it as an investment/rental property, or selling it. The lottery organisation can usually facilitate remote settlement if you can't attend in person.
What happens to my current mortgage if I win?
Your existing mortgage remains separate and unaffected. If you choose to sell your current home and move into the prize home, you'd use sale proceeds to pay off your mortgage. Many winners use this strategy to become mortgage-free. If you keep both properties, you'll continue paying your existing mortgage while managing the costs of the prize home.
Your Prize Home Winner Checklist
Immediate Actions (Week 1)
- Verify the win with official lottery organisation
- Read all terms and conditions thoroughly
- Book appointment with accountant
- Consider engaging a solicitor
- Schedule property inspection if possible
Before Settlement (Weeks 2-3)
- Get insurance quotes and arrange coverage
- Research ongoing costs (rates, body corporate)
- Decide: keep, sell, or rent?
- Get property valuations if selling
- Contact utility providers for connection
Settlement Day
- Attend settlement (or arrange remote signing)
- Receive keys and all documentation
- Ensure insurance starts from settlement date
- Store warranties and manuals safely
- Take inventory photos for insurance
After Settlement
- Transfer utilities into your name
- Register with council for rates
- Join body corporate if applicable
- Set up regular maintenance schedule
- If selling: engage real estate agent
Ready to Win Your Own Prize Home?
Explore current home competitions from trusted Australian organisations. Compare your options with our detailed lottery comparison guide, and learn more about tax implications before you enter.