In an attempt to avoid paying Los Angeles’s new real estate transactions tax (aka the mansion tax), several celebrity homes were put on the market, some slashing prices and throwing in Lamborghinis to try to sell before the tax went into effect on April 1.1
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. But in February, as April 1 loomed, he dropped the price to $55 million. In terms of tax savings, at $87.5 million, the tax would have run $4,812,500. Instead, at $55 million, the tax was “only” $3,025,000, but he also lost out on $32.5 million to make the sale happen.
The mansion tax
In November 2022, voters in Los Angeles approved Measure ULA, which imposes the new Homelessness and Housing Solutions Tax on transfers of real property valued at more than $5 million.
The new tax is:
- 4% of the full consideration paid or value of the property transferred when the consideration or property value exceeds $5 million but is less than $10 million; and
- 5.5% if the consideration or value exceeds $10 million.
The $5 million and $10 million thresholds will be adjusted for inflation.
