If you are looking to sell luxury real estate in Los Angeles it’s about to get a lot more expensive!
Measure ULA is a newly passed law that is being referred to as ‘Mansion Tax’ due the idea of ‘taxing the wealthy’. From April 2023 the taxes paid high value homes will dramatically increase to help generate a pool of money to combat LA’s homelessness.
The law was drafted by a team of homelessness and housing experts – not politicians. The funds raised are estimated to generate between $600 million and $1.1 Billion to go towards helping combat Los Angeles vast homeless community. 92% of the he money generated will go towards construction of affordable housing and building houses faster and at a lower cost than before. It will also be used to send emergency assistance for low-income seniors in danger of becoming homeless and provide legal aid to renters.
Measure ULA will increase The City of Los Angeles mandaory fees paid on high value properties over $5,000,000 only.
With mansion tax in place if your home sells between $5-10 million, the fee that you’ll need to pay is 4% of the sale. If your home sells for over 10 million the fee is 5.5% of the sale.
If you sell a $5,000,000 property, the mansion tax on that sale will cost you $200,000. Moving into the next threshold, selling a $10,000,00 property will set you back $550,000 in fees. That’s an outstandingly high ammount additional funds you’ll need to take into account when selling a property, especially if you are using that money for putting towards another home.
Though these figures might seem high and the law is said to be taxing the wealthy only, reaching figures like these is quite common in such a high property value city like Los Angeles. A home bought for $2.5 million a few years ago that has been renovated or remodelled could now be worthover $5,000,000. There’s a high chance the generational wealth created within that property could be at risk.