At the beginning of March, we detailed Measure E, the imposed tax on properties exceeding over $2 million in San Jose, Ca. As of April 1st, did you know Los Angeles imposed a similar tax called the Mansion Tax? Ironically, the Mansion Taxes barrier of entry is almost double that of Measure E. However, the purpose of the tax is for the same reason - to generate funds for affordable housing. With the looming tax shadowing over the skyline of Los Angeles, it created a flurry of wealthy individuals trying to unload their homes prior to the April 1st deadline. The incentives from sellers included luxury cars and million-dollar commission checks in hopes of luring a buyer prior to the tax deadline.
So, what is the Mansion Tax?
- A tax of 4 percent of the property's value will be imposed on the sale of properties valued between $5 million and $10 million.
- If the property is valued at $10 million or more, the sale will be subject to a 5.5 percent tax.
What are your thoughts on the imposed tax to help affordable housing?