The premise behind Extreme Makeover: Home Edition is a good one. ABC’s reality TV show has a construction crew rebuild a home for a family well in need of a massive makeover. It’s a great charitable cause, right? It seems that way. Unfortunately, a lot of the families on that show have had trouble paying the property taxes that came with their new homes. What happened is the IRS looks at any prize winnings (a completely new home) as income. So they’re now charged higher tax on the winnings. And their property taxes could cost more, too.
Six families that have appeared on the show have had trouble keeping their new homes. Three of them are facing foreclosures. More on the individual stories can be seen here.
So the producers are now trying to find a way to build more sensible homes for the winners. These homes would be ones that they are more able to afford. The problem is that aside from the tax increase, if your square footage on your home recently doubled or tripled, you now have utility bills that can cost you a lot more per month. Think of all the extra space you have to heat and cool.
So what are some other solutions?? Maybe they can offer a stipend of a few thousand a month for the first year to help cover some unforseen costs or even more beneficial, maybe they can have the family sit down with a financial planner to budget more effectively.
Or is the idea of this show just not meant to work given the current housing market? I’d love to hear your thoughts via comment or by visiting me online. You can also view more about the problem in this article.