LA's new 'mansion tax' prompts Hollywood celebrities to sell their luxury homes valued over $5M
LOS ANGELES, CALIFORNIA: Ahead of Los Angeles' new 'mansion tax' coming into effect on April 1, several Hollywood celebrities are reportedly rushing to sell their luxury homes. Measure ULA will require sellers of properties valued at over $5 million (about £4 million) to pay a 4% transfer tax while sales of properties over $10 million will attract a 5.5% tax. The tax revenue will go towards public housing to address the homelessness crisis, with the city aiming to raise up to $1 billion from these sales.
The measure was passed with 57% of the vote in November 2022 after lobbying from housing advocates and labour unions, but it faced opposition from real estate agents who predicted a sell-off frenzy among the wealthiest homeowners. In the recent months, high-profile individuals such as Jim Carrey, Britney Spears, and Kylie Jenner have all listed their expansive properties for sale.
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Celebrities rush to sell luxury homes
In February, Jim Carrey's sprawling 12,700-square-foot property hit the market for $29 million while Britney Spears listed her 11,650-square-foot Calabasas home for $12 million, only six months after purchasing it with her husband, Sam Asghari. Meanwhile, in October, Kylie Jenner and Travis Scott listed their Beverly Hills mansion for over $33 million which they bought for $20.4 million in 2018. Mark Wahlberg had listed his 30,500-square-foot Beverly Hills mansion for sale in April last year, ahead of the new tax's introduction, but had to drop the asking price from $87.5 million to $79.5 million in November before finally selling it in February this year. Paul Nassif, known for his appearance on 'Botched,' has listed his Bel Air mansion at 1035 Stradella Road for $27.995 million to save on the extra tax.
According to Tyrone McKillen, a broker from luxury agency Official, the implementation of Measure ULA has caused a frenzy among sellers who are keen to sell their properties before the April 1 deadline. McKillen also noted that this rush to sell has created numerous opportunities for buyers searching for value in the market.
Why the new tax is necessary?
According to broker Josh Altman, "I'm seeing deals get done that should never have been done" due to the frenzy caused by the introduction of Measure ULA. While the tax has faced backlash from real estate agents, campaigners argue that it will help reduce homelessness and make housing more affordable for low-income senior citizens. With California having the highest rate of poverty in the US, the new tax aims to raise up to $1 billion for public housing to address the growing homelessness crisis. According to the Los Angeles Homeless Services Authority, an estimated 42,000 people were homeless in 2022, up from 28,000 in 2016.