Millionaires race to sell LA homes before 'mansion tax' (2024)

Millionaire LA homeowners are going out of their way to dramatically drop the prices of some multi-million dollar listings in a bid to avoid a new 'mansion tax.'

Sprawling Californiahouses have had as much as $19million knocked off their asking price in the final days beforeMeasure ULA takes effect on April 1, which will immediately start taxing luxury home sales.

Realtors are offering brokers who successfully close deals in the next two days millions of dollars in bonuses, on top of commission, as an final-push incentive.

The ULA measure will bring a one-time tax to high-end property sales, including a 4 percent tax on sales above $5million and a 5.5 percent tax on sales above $10million.

One $27,995,000 seven-bedroom listing in Bel Air came with a particular perk - a $1 million bonus for any agent that could successfully sell it before April 1.

The incentive laid out byJosh Altman and Jade Mills is clear - bring a successful deal to a close, and brokers will get a huge bonus on top of the already hefty commission.

The home, set on1.34 acres, is on an ultra-private, tree-lined hillsideand boastsfar-reaching city and ocean views - and for the buyer, the price has already been reduced by $1million.

OnN Bundy Drive in Los Angeles, a seven-bed 11-bath mansion has had a 11.6 percent slash on its asking price because of the incoming tax fear.

The gorgeous home has a250-bottle wine cellar, full basketball court and a colossal master bedroom.

The listing reads: 'Imbued with intentional style and sophistication, a home of this caliber is rare to hit the market.

'It is the culmination of only the most modern and unique amenities & finishes; transforming the home into an all-in-one private resort retreat across 1.3 acres of land, sitting on a private cul-de-sac street and fully secured with a laser system & 24/hour guard house.'

The mansion is now for sale for $38,000,000 - but was previously listed for$42,995,000, meaning there has been nearly a $5million price drop ahead of the impending mansion tax.

Meanwhile on Somma Way, a $59,000,000 home described as a 'modern Spanish Revival masterpiece' has been reduced by a staggering $19million - a 24 percent price drop.

It's locatedabove the Hotel Bel Air in the heart of the most exclusive neighborhood in the world, and has '8 bedrooms, 21 bathrooms, and an endless array of awe-inspiring amenities.'

The massive reduction is believed to be in response to the mansion tax - as people try to sell hefty properties before the mandate comes into action.

One penthouse property onW Century Dr in LA, which has360-degree panoramic views from the Hollywood Hills to the Pacific Ocean to Downtown, dropped $1.5million in price just three days before the April 1 deadline.

On March 29, the price dipped by 9.1 percent from$16,495,000 in a bid to lure sellers in before the tax kicks into play.

And on Blue Jay Way, another sprawling inside-outside property in a gorgeous location slashed its price by $1.5million to$13,999,000 just days before the new tax.

On Sierra Mar Dr, the seller has dropped their price by $1million ahead of the hefty tax. It's described as an 'organic, modern-marvel of design set in the heart of the Bird Streets and delivers an extraordinary indoor/outdoor lifestyle.'

Meanwhile, a mansion with a side of Ashton Martin, Bentley, or a McLean seems too good to be true, but not for this Los Angeles property developer, who is enticing homebuyers to snap up a multimillion-dollar home with the prize of a brand new car.

Homebuyers who are interested in buying a $16.5million Mulholland Drive home in Beverly Hills by April 1 will also receive a 2023 Aston Martin Vantage, Aston Martin DBX 707, McLaren GT or a Bentley Bentayga EWB if they can close escrow by the end of the month.

Agents, like Tatiana Derovanessian, and sellers have been attempting to figure out ways to get around the tax, from dividing up properties as much sales under $5million to offering a luxury car to sweeten the deal.

However, the promise of a luxury car only last until April 1. Otherwise, buyers can purchase the home, but say goodbye to the free luxury car.

Dan Malka at Ikon Advisorstold DailyMail.com:'It's stressful for everyone. A lot of sellers are trying to give incentives, they are trying to get creative.

'On my end, I'm selling a big house in Brentwood for $38million - and the plan was to bypass the tax by having a $2million discount before April 1 - and then after it's going to be listed at $41million to reduce the price.

'This mansion tax has been largely misleading, first by the name. They should have advertised not as a mansion tax - its clearly misleading - it's a piece of real estate in LA city. For five million is not that hard to find a house in LA, the market is still growing.

'The4%, 5.5% in tax, in my opinion, it's very aggressive. I'm not against the idea, its interesting, but the terms are not fair for the seller.'

He said: 'We're going to see a increase of the rents in the commercial world, for the brand new buildings, an increase of the rents. at the end of the day, that's going to affect tenants.

'I think it's unfair if a seller is getting a loss, the seller is still going to have to pay the tax.'

And he also said that the tax is potentially going to negatively affect real estate brokers - because sellers will be having to pay their commission fees, as well as the taxes.

This means the profession may 'need to adapt.' He said: 'I am worried about the fact that the 5.5% tax represents nearly the same amount as the commission brokers would get.

'What I can feel and sense, in our professional field, is that this will impact our commission because the sellers aren't going to be wanting to pay for a broker and the tax. The profession is going to have to adapt.

'As a relator and broker, we might see our commission being impacted because it takes a lot in the selling price.'

'That's going to hurt the market in a very bad way, and in an economic context it's not good. It's going to slow transactions for 6 to 8months because the market will slow down.

Speaking about how the tax is set to help the homeless situation in LA, he said: 'It sounds more like a punishment, like we want to punish the rich to help the homeless, and this is not the way to do it.

And if people want to sell their multi-million dollar homes after April 1, people will have to just 'sit on it,' and see how the market reacts.

He said: 'Sellers had time to get mentally prepared since November, at the end of the day, they are going to have to sit on it, or hold off from selling the property, and there going to wait and see what's going on.'