The Mansion Tax in Los Angeles Impacts the Real Estate Market

One of the most notable characteristics for which the city of Los Angeles is recognized is that within its territory live, or own properties, people who perhaps have the highest purchasing power in all of the United States.

Another factor for which the city is known is the dozen streets occupied by tents where thousands of people without stable housing live. Recent data indicates that Skid Row houses more than 7,000 people in this area; this issue is linked to the lack of housing programs that create much more difficulty for residents to access affordable housing.

In order to obtain resources and seek solutions that help implement programs allowing greater housing affordability for these homeless individuals, the official authorities of Los Angeles, through the Department of Housing, decided to create a tax on properties known as mansions or luxury homes located within the city limits.

Less than two years ago, the mansion tax law came into effect, and to date, more than $430 million has been raised thanks to multiple sales of these properties. According to the United to House LA law, a tax will be imposed on all property sales that exceed $5 million in transaction value.

With this imposition of taxes on mansions, the real estate market for this type of property has logically shown marked impacts, a situation that did not occur before the enactment of this law, where sales of these homes generated good profitability for real estate agents and their wealthy owners.

According to the Los Angeles Department of Housing, the neighborhoods that have seen the greatest revenue generation from taxes incurred through the buying and selling of mansions are in the western area of the city.

From District 5, which includes the areas of Beverly Crest and Bel-Air, reports indicate that 138 mansions have been sold, generating more than $80 million in revenue. From District 11, more than $70 million has been collected from 174 registered properties.

Of all the areas in Los Angeles, the most influential neighborhoods preferred by artists from all over the United States and wealthy individuals from abroad are Silver Lake, Los Feliz, and Hollywood Hills. In these areas, which comprise District 4 of the Council, only 127 mansions have been sold, generating just under $60 million from tax collection.

The other areas that are even more notable in all of Los Angeles, California, are Malibu, Calabasas, and Beverly Hills, but these properties, being outside the city limits, are not required to pay taxes on their sales; these homes are classified under the law as exempt from payment.

Available Foreclosures:

Bel-Air: 5 homes available.

Beverly Crest: 3 homes available.

Brentwood: 4 homes available.

Pacific Palisades: 2 homes available.

Hollywood Hills: 6 homes available.

Silver Lake: 1 homes available.

Los Feliz: 2 homes available.

By Elías DaSilva | 14 de Noviembre de 2024.