What is Mansion Tax? 'Million Dollar Listing: Los Angeles’ Josh Altman fears for LA
LOS ANGELES, CALIFORNIA: When purchasing a home, it can often feel like navigating through a storm of fees and taxes. From lender fees to property taxes and closing costs, there are numerous financial obstacles to overcome in order to achieve the dream of homeownership.
In addition to these expenses, buyers may also encounter a mansion tax, a type of real estate transfer tax that is imposed on properties sold above a certain threshold. This tax, which is typically associated with high-end properties, varies in amount depending on the location and selling price of the home.
For example, in New York City, any property sold for over $1 million is subject to a mansion tax, regardless of the type of dwelling. The buyer is responsible for paying this tax, which is calculated as a percentage of the home's sale price.
Los Angeles has recently implemented a new tax targeting some of its most affluent residents and their properties to generate revenue for affordable housing initiatives.
Renowned real estate agent and television personality Josh Altman, known for his role on 'Million Dollar Listing: Los Angeles' and as co-founder of Altman Brothers Real Estate, has expressed his concerns regarding the implications of this new law.
“Yeah, of course, it's great because it helps the homeless and affordable housing. But they didn't think about the other side of this measure here, where it's going to actually chase people out of LA that are going to take their thousands and thousands of jobs and employees that they employ with them," Altman told Yahoo Finance.
'Million Dollar Listing: Los Angeles' star Josh Altman reveals he got more deals before implementation of mansion tax
The Measure ULA, which went into effect on April 1, 2023, implemented a new tax system for properties in Los Angeles. This system includes a 4% tax on properties selling for $5 million to $10 million and a 5.5% tax on properties selling for over $10 million. These taxes are in addition to the half percent tax that Los Angeles residents already pay on their homes.
“The issue is, these people that have bought houses two years ago and for some reason, they want to sell their house now, not only are they going to be down because the market's down, but now they have to cut that 4% and 5.5% check out of their pocket, off of their loss. How crazy is that?" Altman added.
Altman mentioned that his company has seen a significant increase in transactions as wealthy residents in Los Angeles rushed to sell their properties prior to the tax being put into effect. He also stated that he was offered a substantial bonus in addition to his regular commission if he could successfully close a specific deal worth millions of dollars.
He continued, “I can tell you, I have seen more deals get done this month in the month of March than I've seen in my entire 20 years of being in some aspect of real estate — it is just out of control right now. Everyone's trying to close. The clock's ticking.”
'Million Dollar Listing: Los Angeles' star Josh Altman shares that new tax would 'hurt LA real estate market'
Altman argued that the implementation of the new tax would have negative consequences on the Los Angeles real estate market as a whole, rather than solely impacting affluent individuals seeking to sell their properties. He believed that the tax would be detrimental to the entire community, not just those looking to profit from selling their homes.
“It's going to trickle down all the way to the bottom. If people think they were not going to be affected because they don't have homes that are worth more than 5 million, I promise you, they are going to be affected because their houses, too, are going to go down in price," Altman told the media outlet.
Altman strongly advocated for the implementation of alternative methods of assistance for individuals experiencing homelessness. He firmly believed in the need for diverse and innovative approaches to address the challenges facing this vulnerable population.
“I'm all about housing for homeless, affordable housing. But there's better ways to do it, and it's not just on houses. It's also on commercial properties, investment properties, across the board," he added.
Who stars in 'Million Dollar Listing: Los Angeles' Season 15?
Returning for 'Million Dollar Listing: Los Angeles' Season 15 are agents Josh Altman, Heather Altman, Josh Flagg, and Tracy Tutor.
A press release for the show's upcoming season reads, "After a couple of significantly groundbreaking years in Los Angeles luxury real estate, the housing market has taken a turn for the worse. Between high interest rates, the 'Mansion Tax' and a low inventory of homes, the city’s hottest agents Josh Altman, Josh Flagg and Tracy Tutor are back and feeling a new kind of heat."
It further reads, "Stuck in the middle of a shaky market, deals are dragging out, taking much longer to close than before. The agents find themselves accepting deals they never would have previously and getting more innovative with their strategies, employing any means necessary to close the deal."
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'Million Dollar Listing: Los Angeles' Season 15 premieres on Wednesday, July 10 at 9 pm ET on Bravo.
