(NewsNation) — A looming transfer tax deadline in Los Angeles is forcing owners of multimillion dollar homes to sell before the city’s “mansion tax” goes into effect on April 1.
Known as the “mansion tax,” Measure ULA was implemented in order to help fund affordable housing for LA’s homeless populations. It’s a measure Los Angelenos voted for in November 2022; its goal is to bring in $1 billion annually to fight LA’s homeless problem.
So how does this Los Angeles mansion tax work?
Under the new measure, sellers will have to pay a 4% tax on property sales above $5 million and a 5.5% tax on properties above $10 million.
For example, a $5 million home would force the seller to pay a tax around $200,000.
NewsNation saw a mansion listed with an asking price of nearly $20 million — it’s a dream home for many, with seven bedrooms and 10 bathrooms — but if it’s not sold before Saturday, the seller will be forced to pay more than $1 million in property taxes.
Some wealthy sellers have gotten creative, selling furniture, artwork and cars to keep the cost of their homes down.
“There’s definitely some creative options. I just saw a headline for someone selling the house with a free McLaren, so that a car can get away with being under a certain price point,” said Kerry Ann Sullivan, a listing agent.
Realtors told NewsNation some of LA’s richest residents are leaving altogether, moving to Florida and Texas to avoid these taxes.