Mansion madness: Los Angeles realtors in sell-off frenzy as wealth tax looms
As the clock ticks down to the start of Los Angeles’ new “mansion tax”, the city’s real estate market is offering some deadline deals.
On Instagram, two high-end realtors touted a $1m bonus to any agent who helped sell a $28m Bel Air mansion by 1 April. Another 260-acre Bel Air property which went up for auction this month (starting price $39m) offered buyers a $2m credit if they were able to close the deal by 31 March.
In Beverly Hills, a listing for a $16.5m mansion offered buyers “a brand new” luxury car – Aston Martin, Bentley or McLaren – if they purchased the property before the deadline.
The new tax, designed to raise public funds to prevent homelessness in one of the most expensive housing markets in the country, imposes a 4% tax on property sales between $5m and $10m, and a 5.5% tax on sales over $10m.
Voters approved the tax in November, amid a growing humanitarian crisis that has left more than 28,000 people unhoused and living outside in Los Angeles. Real estate interests are now fighting the new law in court, arguing that it violates California’s constitution.
With the outcome of the legal challenge unknown, the real estate market is adjusting to the expected tax, with buyers and sellers exploring new workarounds.
Some properties that might have been priced in the low $5m range are now being marketed at $4.9m, just under the tax cutoff, with buyers agreeing to pay a property’s closing costs instead of the sellers, said Ken Fields, a Los Angeles real estate attorney.
With pricier properties, “There has definitely been a push to sell before the deadline to avoid the tax,” he said. “I can think of several deals where the sellers have termination rights if the transaction doesn’t close by the deadline.”
Proponents of
Read more on theguardian.com
