Stay ahead of the trend in fashion and beyond with our free weekly Lifestyle Edit newsletter
Stay ahead of the trend in fashion and beyond with our free weekly Lifestyle Edit newsletter
A number of Hollywood’s elite are reportedly in a hurry to sell their luxury homes ahead of 1 April, when Los Angeles’ new “mansion tax” comes into place.
The tax, called Measure ULA, will require sellers of properties of more than US$5 million (approximately £4 million) to pay a four per cent transfer tax.
It will also require sales of more than US$10 million to pay a 5.5 per cent tax, with all funds raised going towards public housing. The city aims to raise up to US$1 billion from these sales in an effort to tackle the growing homelessness crisis.
Measure ULA was passed with 57 per cent of the vote in November 2022, after housing advocates and labour unions campaigned to get it on the ballot. But it faced backlash from real estate agents, who warned it would cause a “frenzy” of sell-offs among the wealthiest homeowners.
Celebrities including Jim Carrey, Britney Spears and Kylie Jenner have all put their sprawling properties on the market in recent months.
Carrey’s home, which spans across 12,700 square feet, went on the market in February for US$29 million, while Spears reportedly put her 11,650 square foot home in Calabasas on the market for US$12 million just six months after she and husband Sam Asghari purchased it.
It was first reported in October that Jenner put her Beverly Hills home, which she owns with partner Travis Scott, up for sale for more than US$33 million. The couple bought the seven-bedroom, 10-bathroom property in 2018 for US$20.4 million.
Mark Wahlberg put his 30,500 square-foot mansion in Beverly Hills on the market last April, well before the measure was introduced. However, he dropped the asking price from US$87.5 million to US$79.5 million in November, and finally found a buyer in February this year.
Tyrone McKillen, a broker from luxury agency Official, told The New York Times that Measure ULA “created a bit of a frenzy, with people trying to beat the 1 April date and lots of opportunities for buyers looking for value”.
Another broker, Josh Altman, added to The Telegraph: “I’m seeing deals get done that should never have [been] done.”
Measure ULA campaigners say the tax will help reduce homelessness in the city, as well as provide financial assistance to low-income senior citizens and make housing more affordable.
California has the highest rate of poverty in the US. In 2022, an estimated 42,000 people were homeless, compared to 28,000 in 2016, according to figures from the Los Angeles Homeless Services Authority.
FAQs
A number of Hollywood's elite are reportedly in a hurry to sell their luxury homes ahead of 1 April, when Los Angeles' new “mansion tax” comes into place. The tax, called Measure ULA, will require sellers of properties of more than US$5 million (approximately £4 million) to pay a four per cent transfer tax.
What celebrities are avoiding the mansion tax? ›
According to the New York Post, celebrities who rushed to sell to avoid the tax were Jim Carrey, Mark Wahlberg, Jennifer Lopez, and James Corden. Months before the tax even passed, Mark Wahlberg put his 30,500 sq. ft. home on the market for $87.5 million.
Did the mansion tax pass in Los Angeles? ›
Los Angeles voters famously passed the “mansion tax” by ballot initiative in 2022.
Who pays the tax on LA mansion? ›
The so-called mansion tax in L.A. applies to property sales of at least $5 million. Properties over $5 million incur an additional 4% tax, while properties costing more than $10 million have an extra 5.5% tax—with the tax typically being paid by the seller.
Does Los Angeles mansion tax apply to Beverly Hills? ›
For properties partially located in Los Angeles
It's not uncommon for people to refer to Los Angeles County as simply LA when, in reality, the county is made up of different cities including the City of Los Angeles. The LA mansion tax only applies to real estate transactions located within the city's bounds.
What celebrities dodged millions in mansion tax? ›
He sold his Hollywood Hills home for $39 million in the last days of March. By doing so, he avoided a $2.145-million tax bill. Mark Wahlberg, who founded the Mark Wahlberg Youth Foundation, unloaded his Beverly Park mega-mansion for $55 million in February, saving $3.025 million in taxes by selling it before April 1.
Why are Hollywood stars selling their homes? ›
A number of Hollywood's elite are reportedly in a hurry to sell their luxury homes ahead of 1 April, when Los Angeles' new “mansion tax” comes into place. The tax, called Measure ULA, will require sellers of properties of more than US$5 million (approximately £4 million) to pay a four per cent transfer tax.
Does Beverly Hills have mansion tax? ›
Measure ULA, which stands for United to House LA, imposes a new tax for the city of Los Angeles. The measure, also described as the “mansion tax,” imposes a 4% tax on property sales exceeding $5 million, and a 5.5% tax on properties that sell at $10 million or higher.
Will the LA mansion tax be repealed? ›
However, the mansion tax measure is now facing a repeal, as the projected revenue it was anticipated to generate has failed to meet its benchmarks. This shortfall can be attributed to the combination of high mortgage rates and the resulting hesitation from both homebuyers and sellers to participate in the market.
Does NYC have a mansion tax? ›
The NYC Mansion Tax is a buyer closing cost which ranges from 1% to 3.9% of the purchase price, applicable on residential purchases of $1 million or more in New York City. The Mansion Tax is part of the real [...]
Why was the California mansion tax implemented? California's new mansion tax, also known as Measure ULA (United to House LA), is designed to generate revenue for housing in Los Angeles.
How does the LA mansion tax work? ›
Measure ULA establishes a 4% tax on all real property sales priced or valued at $5 million to no greater than $10 million and a 5.5% tax on real property sales priced or valued at $10 million or greater.
Why does LA have mansion tax? ›
The revenue raised by the tax increase would be dedicated to efforts to combat homelessness. Proponents say it would lower taxes on the majority of home sales while projecting increase revenue of $100 million dollars a year. But those opposed warn it could seriously harm commercial real estate.
How to avoid LA mansion tax? ›
Divide the Property
If the home is valued under $10 million, it's possible to avoid the tax by selling each share for under $5 million.
Does Santa Monica have a mansion tax? ›
The Mansion Tax in Santa Monica is 5.6%, and it applies to sales of $8,000,000 or more. This tax bracket was part of voter-approved Measure GS which took effect on March 1, 2023.
What is the millionaire tax in Los Angeles? ›
The measure imposes a 4 percent tax on properties listed between $5 million and $10 million; at $10 million and above, the tax bumps up to 5.5 percent.
What actor refused to pay taxes? ›
Terrence Howard Ordered to Pay Nearly $1M in Federal Tax Evasion Case. The latest legal entanglement for the Oscar-nominated actor came after he told a DOJ official that it is "immoral" to tax the descendants of slaves.
How do the very wealthy avoid estate taxes? ›
Private-placement life insurance, or PPLI, can be used to pass on assets from stocks to yachts to heirs without incurring any estate tax. In short, an attorney sets up a trust for a wealthy client. The trust owns the life-insurance policy that's created offshore.
How do millionaires avoid estate taxes? ›
How The Wealthy Save On Estate Taxes. If you are worth hundreds of millions or billions, your estate will far surpass the estate tax exemption amount. As a result, you need to set up a GRAT. You, the grantor, transfer assets to a trust (GRAT) and retain the right to receive an annuity payment for a term of years.
