Los Angeles ‘mansion tax’ is no laughing matter for film stars
SOME of the biggest names in Hollywood are rushing to sell their multimillion-dollar houses in Los Angeles before a new “mansion tax” kicks in on Saturday.
In November, voters supported Measure ULA – “United to House LA” – which is intended to raise up to $1billion from luxury house sales to fund affordable housing projects.
From April 1, the sellers of homes valued at between $5million and $10million (£4million and £8million) will pay a 4 per cent tax to the city. Those selling homes for more than $10million will pay a 5.5 per cent tax. Los Angeles introduced the levy to “fund affordable housing projects and provide resources to tenants at risk of homelessness”.
Last year, the Los Angeles Homeless Services Authority estimated 42,000 people were homeless, up from 28,000 in 2016. California has one of the highest poverty rates in the United States. The tax has led to a scramble by estate agents who have been slashing prices and looking to off-load mansions quickly. One property broker reportedly offered a $1 million bonus to any estate agent who could find a buyer for a $28million (£23million) Bel-air mansion before the deadline. Celebrities who recently sold their properties included Mark Wahlberg, who sold for $55million.
However, his 12-bedroom, 20-bathroom mansion had been on the market for nearly a year, since well before Measure ULA was introduced. Jim Carrey put his 12,700 sq ft property, with two acres of land, on the market last month for $29million (£23.7million).
Josh Altman, a broker and television personality, said: “I’m seeing deals get done that should never have gotten done.” The tax is on sales prices, not profit, so sellers have to pay even if they are making a loss.