It's a phone call nobody expects. "Congratulations, you've won the prize home."
Your heart jumps. You've won. You actually won. A three-bedroom house worth $2 million is yours.
Then reality hits. You've got questions. A lot of them. Can you actually afford to live in it? What about stamp duty? Rates? Can you sell it? Do you want to?
Here's what actually happens when you win a house in a lottery.
The Notification And Legal Transfer
The lottery organiser will contact you within a set timeframe, usually spelled out in the terms and conditions. They'll verify you're the ticket holder. They'll explain the next steps.
The legal transfer process can take anywhere from four weeks to three months, depending on the state and complexity. The property will be transferred into your name through a conveyancer or solicitor. You'll need to sign documents. Everything goes through the standard property transfer system.
This all costs money. Conveyancing fees typically run $500 to $1,500. That comes out of your pocket, not the prize.
Stamp Duty And Government Costs
Here's the big one that catches people off guard. In most Australian states, when you win a prize property, you don't pay stamp duty on the transfer. This is a genuine exemption in the law because you didn't buy the property at market value, you won it.
But you will pay government and legal fees to register the transfer. Expect anywhere from $200 to $1,000 depending on your state.
Where it gets complicated: if you later sell the property for a profit, you might pay capital gains tax on any increase in value from the day you won it. For example, if you win a house valued at $2 million and sell it two years later for $2.3 million, you'll owe capital gains tax on the $300,000 gain (minus a 50% discount if you've held it over 12 months). For tax purposes, you should consult a professional accountant to understand your specific situation, as capital gains tax rules can be complex depending on your income and the property's use.
Council Rates And Ongoing Costs
The day you win, the council rates become your problem. You're now the owner. That property tax bill is yours.
Rates vary wildly depending on location and state. A $2 million house in Sydney might have $5,000 to $7,000 in annual rates. A similar house in regional Queensland might be $2,500 to $4,000. Check the property listing or contact the local council to get a real number.
Insurance is non-negotiable. Buildings insurance on a $2 million property will run you $2,500 to $5,000 a year, depending on the area. Contents insurance is extra. Land tax applies in some states on investment properties (more on this below).
Maintenance is the silent killer. You win a 30-year-old property, the roof might need work. The plumbing might need updating. The garden might be an overgrown mess. Budget for surprises.
Can You Sell It?
Yes. You own it. You can sell whenever you want.
But you need to understand the capital gains tax implication. The property is valued at, say, $2 million when you win it. That's your "cost base" for tax purposes. If you sell it three years later for $2.2 million, you owe capital gains tax on the $200,000 gain. At the top rate, that's roughly $60,000 to $90,000 in tax (depending on your income and the 50% discount for holding it over 12 months). Again, consult a tax professional for your specific circumstances.
This can catch people off guard. You think you've won this amazing prize, then you sell it for a profit and suddenly the tax bill is significant. That's why getting professional advice early is important.
Some prize home winners sell the property immediately and use the money to pay off a mortgage or invest in something smaller they can afford to run. That's a legit strategy.
Can You Rent It Out?
Yes, but it becomes an investment property.
You'll owe capital gains tax when you eventually sell (on any increase in value from the day you won it). You'll owe land tax in some states. You'll have to manage tenants, maintenance, and repairs. Any rental income is taxable.
Some winners rent out the property and use the rental income to cover rates, insurance, and maintenance. Others find that costs exceed income and they lose money on it.
The maths need to work. If the property costs $8,000 a year in rates and insurance alone, you need rental income of at least that much to break even.
What If You Can't Afford The Running Costs?
This is the uncomfortable reality some winners face. You've won a luxury property, but you can't actually afford the upkeep.
Options:
Sell it. You can sell the property any time and use the proceeds however you want. You'll owe capital gains tax on any profit from the day you won it, but that's it.
Rent it out. If the maths work, rental income can cover costs.
Ask the organiser for help. Some lottery organisations offer advice or can connect you with specialists. It's not a common ask, but it doesn't hurt.
Downsize later. Some winners hold the property for a few years, let it appreciate, then sell and move to something they can afford.
Real Stories
Dream Home Art Union (formerly RSL Art Union) has been running prize home lotteries since 1956. Winners have included families who live in the property, retirees who sell it and fund their retirement, and investors who rent it out.
One of the most common outcomes? Winners sell the property within two years. Not because they don't like it, but because they realise they can't afford to run it, or they prefer to use the money for something else entirely.
Winning a house is genuinely life-changing. But it comes with costs and decisions most people don't anticipate. Conveyancing fees, rates, insurance, and potential capital gains tax all add up.
The good news? You own it outright. No mortgage. No debt. You can make whatever choice actually works for you, whether that's living in it, renting it out, or selling it and cashing in.
Comparison sites and prize draw aggregators can help you track draws from multiple operators across Australia, so you can research which lottery platforms align with your goals.
Just go in with your eyes open about the costs, and consider consulting with a professional accountant or tax advisor about your specific situation.