This is how the new mansion tax is impacting the Los Angeles market.
Today, I'm here to share some updates about the ULA, the mansion tax recently implemented in Los Angeles. This tax imposes an additional 4% charge on homes valued between $5 million and $10 million, and a 5.5% charge on homes over $10 million.
Interestingly, there was a significant increase in the number of transactions in March leading up to the April 1 deadline. Typically, the city sees about 1,000 transactions over $5 million per year, averaging roughly 80 transactions per month.
In March, however, the number of transactions nearly doubled to around 160. Then came April, when only two homes were sold in the entire city of Los Angeles, a drastic decrease from the usual 80. This is largely because many sellers were disgruntled about this amendment, viewing it as unconstitutional, unequal, and unfair, given it only affected 1,000 people in the entire city.
Looking forward, we anticipate an increase in transfers and closures in May. Moreover, there's a high likelihood that this tax could be repealed in the coming months. If you have any questions about this amendment or anything else related to real estate, call or email me. I’m always happy to help.
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