The first months of 2023 have been excellent for getting rid of a mansion in Los Angeles. A proposed tax to benefit the construction of popular housing served as fuel for dozens of luxurious residences to change owners. The tax, known as the mansion tax, was approved in a previous referendum and came into effect in April. The tax rate is 4% t…
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The first months of 2023 have been excellent for getting rid of a mansion in Los Angeles. A proposed tax to benefit the construction of popular housing served as fuel for dozens of luxurious residences to change owners. The tax, known as the mansion tax, was approved in a previous referendum and came into effect in April. imposes a 4% tax on all housing sales over $5 million, which generated about $200,000 to attend to the city’s urgent homelessness problem. The rate is progressive and rises to 5.5% for homes over ₹10 million ($550,000). The tax raised the temperature in one of America’s hottest housing markets.
The tax sparked a frenzy in Los Angeles, a city where mansions abound. Owners who doubted whether to sell or not found the right excuse in the solution proposed by the townspeople. The local press was full of notes in March on the tricks used by millionaires to remove their properties from the classifieds. For example, the owner of a luxurious residence at Beverly Crest in downtown Santa Monica offered to drive potential buyers into the transaction one of the vehicles visible in images of his mansion’s facade that he posted for sale. was kept for , for $16.5 million. These were McLaren, Aston Martin or Bentley. Celebrities who decided to destroy their homes to avoid paying this tax include Jim Carrey, Mark Wahlberg, Jennifer Lopez and television presenter James Corden.
Creativity entered the real estate market between January and March. Various schemes were devised to avoid the tax, which aimed to add another weapon to Los Angeles County’s tools to reverse the situation of some 50,000 homeless people. Some owners opted for an exemption valid only in March, others bet on dividing their plots so that the value does not reach five million. Some have gone to law firms to sue the city over a tax they feel is unconstitutional.
But the bubble has burst. “We had an extraordinary March, a lot of high-priced properties sold that month, but the trend is now downward,” Mauricio Umansky, president of the Agency, a boutique real estate agency for millionaires, said recently. In March, at least 126 property transactions worth more than $5 million were closed. On the other hand, April had only two.
lebron james neighborhood
The sale of this pair of properties, in the Venice and Brentwood areas, neighborhoods where Lakers star LeBron James lives, raised $528,000 in taxes for the House LA program (the Fund to Stop Homelessness and Affordable Housing). These resources can now be used by the city in prevention programs. However, this figure is far from what the three urban planners collecting signatures thought. The initial forecast was to reach $900 million, which he calculated between 2021 and 2022 based on market activity. The Los Angeles experiment is the most aggressive of its kind. New York, another city with a large homeless population, has a similar tax. It’s 1% for every asset valued over one million dollars. These taxes, borne by sellers, are added to other fees such as the property tax, which is 0.82% in Los Angeles County.
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