California ‘mansion tax’ means discounts for Los Angeles palaces and mansions

• Los Angeles homeowners looking to sell their multi-million dollar homes are in a rush to sell this week.
• A new “mansion tax” approved by voters in November goes into effect April 1.
• Los Angeles’ most expensive real estate transaction tax will generate revenue for affordable housing programs.

If you have millions to spare, this week could be the perfect time to become the owner of a mansion in Los Angeles.

A new tax approved by Los Angeles voters in November and taking effect April 1 will add millions in spending to some of Los Angeles’ most expensive real estate transactions. Critics told the New York Times and The Hollywood Reporter that the new tax will only encourage developers to build new homes outside of Los Angeles to avoid the new tax.

LA voters approved Proposition ULA, commonly known as the “mansion tax,” by a 58% to 42% margin. The ballot measure proposed an additional tax on high-value real estate transactions; the estimated $600 million to $1.1 billion in tax revenue would go to fund affordable housing and homelessness prevention programs.

The new ordinance requires the seller to pay a 4% tax on sales of properties between $5 and $10 million, and a 5.5% tax on sales over $10 million. Due to go into effect soon, on April 1, some of the most expensive homes on the market are heavily discounted in an attempt to sell them before then.

Included in that group is the Star Resort being sold by Ikon Advisors, currently on the market for $6 million less than what the current owner paid two years ago, according to CNBC.

The seven-bedroom mansion with nearly 17,000 square feet of interior space and more than 50,000 square feet of outdoor space is for sale for $38 million, which would generate more than $2 million in new taxes if sold after this date. week. The tax calculator website says it is applied in addition to the existing Los Angeles property transfer tax of 0.45%. Sellers have to pay the tax regardless of whether they make a profit or lose money on a transaction.

Ikon Advisors’ Dan Malka told CNBC that the discounted price means his company represents a seller who is motivated to close a deal as soon as possible, saying the price will rise to at least $41 million once the new tax is applied. effect, with no intention of accepting offers below said price.

The massive Brentwood home also features a Kobe Bryant-themed basketball half court, along with murals of Bryant and other NBA legends, including Shaquille O’Neal, Magic Johnson and Steph Curry.

The Star Resort includes a car showroom, 70-foot infinity pool, home theater, putting green, and indoor sports simulator for golf, soccer, and hockey. The list for the massive mansion has an endless list of features and amenities, including multiple fireplaces, living rooms, a gym, a cactus garden, and a 250-bottle wine cellar spread over four floors of indoor and outdoor space.