The real estate market may be cooling nationally, but among the multi-millionaire set in Los Angeles, it’s been red hot — so much so that some sellers are burning up.
Sellers are throwing in brand new Bentleys and McLarens and slashing prices heavily to encourage a quick closing.
That’s because a so-called “mansion tax” went into effect on Saturday in Los Angeles, a 4% tax for sellers on homes selling between $5 million and $10 million and a 4% tax on amounts of $10 million and more. Adds 5.5% tax.
The change would add hundreds – if not millions – of dollars in additional new transfer taxes for sellers, which would go to support a homeless housing measure passed by Angelenos last November.
Celebrities like Jim Carrey and Mark Wahlberg, not to mention lesser known multi-millionaires, have all rushed to leave their homes in the past few months.
Carrie made a big decision after 30 years in her 12,700-square-foot home in Brentwood List it in February for $29 million,
No takers yet.
Same with Jennifer Lopez, who Put Her Bel Air Place Up for Sale in February.
James Corden is ready to crash and burn the price of his Brentwood Park house, recently slashing it from $22 million to $17.95 million.
But that’s nothing compared to Mark Wahlberg.
The “Ted” actor put his 30,500-square-foot property on the market for an eye-watering $87.5 million before the measure was passed.
but that Finished selling Beverly Park property for $55 million – 37% price drop – in Feb.
“It’s crazy out there right now,” said Josh AltmanA luxury broker in Los Angeles with Douglas Elliman who appears regularly on Bravo’s “Million Dollar Listing”.
Several brokers told The Post they thought Wahlberg could have done better, if not for the impending deadline on that multimillion-dollar tax bill he faces beginning this April Fool’s Day.
“I’ve actually become not only the real estate agent I signed up for, but I’m now a yacht salesman, a car broker and a wholesale furniture salesman,” Altman said of the sellers’ offers to entice buyers. are doing. “This is what it came down to.”
Altman said that after two decades in the real estate business, he’s had a record month of his career, despite declining home sales numbers nationwide.
In just the past 72 hours alone, Altman said it has closed about 20 deals.
They sold $205 million in March—nearly double the normal sales of $104 million per month, hitting their team as top sellers in the country.
“People need to be as creative as possible to motivate them to close on the buyer before [tax goes into effect]”said Altman. “Sometimes it’s a way of … cutting your losses. Maybe [throwing in] A Lamborghini that costs $350,000 … will save you $600,000 in taxes, so you can have it.
Altman a buyer’s Agent on top of regular commission to try and land a seven-bedroom Bel Air mansion listed for $27,995,000.
Although it went into counteroffers, the home is not closing in time to meet the deadline, he said.
Still, Altman considers the incentive a win-win offer because so many agents showed up to check out the place and potential deals are progressing.
Tyrone McKillen, a broker with the luxury agency Official, said he completed a whirlwind 48 hours on Wednesday, the fastest he’s ever done.
This was for a six-bedroom, 11,000-square-foot home in Windsor Square that was restored by designer Jake Arnold.
It dates back to 1917 and boasts its own Prohibition-era speakeasy bar.
selling price?
$16 million – below the initial listed asking of $19,995,000.
“The last few weeks have been a bit of a frenzy,” McKillen said, noting that he also sold his home.
He has made an impressive five deals on expensive homes in the last few weeks.
All five, he said, were closed “with a stipulation in the contract that the deal would either be canceled or a 5.5% tax increase should the escrow be delayed beyond this week.”
The “mansion tax” has given rise to some “Hail Mary” marketing approaches, said Tatiana Derovensian, a luxury agent with Keller Williams in Beverly Hills.
Take the developers selling a five-bedroom, eight-bath Mulholland Drive mansion in the coveted 90210 zip.
For $16.5 million, you can have a “luxury home and luxury vehicle of your choice” within the fleet we have through Beverly Hills luxury car dealer O’Gara Coach Company.
The deal covers vehicles priced up to approximately $400,000, including the Aston Martin Vantage, Aston Martin DBX 707, McLaren GT or Bentley Bentayga EWB.
“The strategy was to create an offering in this range for a buyer who loves a luxury vehicle, luxury home, who probably has luxury watches, luxury yachts,” Derovensian said.
She noted that the home itself is “a car house” with a 1,300-square-foot underground “auto gallery.”
The house has attracted international interest with buyers from Germany and Mexico, and some flying in from Hong Kong to see the house, but it has yet to be sold.
come saturday That deal is off the table.
But, Derovensian quickly jumps in to note, “Everything is negotiable.”
It said its vendors have resigned to pay the tax at this point.
“We’re probably going to pay for it, because it’s very hard to buy before April 1,” Derovensian said.
“Does it seem so unfair that our property is in Beverly Hills 90210, [but is] Agreed [the neighborhood of] Beverly Hills Post Office. It’s technically located in the city of LA that gets that tax, but those two miles below us are not taxed. They’re the city of Beverly Hills.”
There is much grumbling among sellers and their agents, who believe the tax will scare away developers, affect employees in the local economy and ultimately lead to less development.
“It’s a strange irony to discourage homebuilders from dealing with one of the worst crises in the country,” McKillen said.
He and other brokers note that a $5 million home in Los Angeles is hardly a mansion given the increase in property values through the pandemic, and that many homes will be classified as $5 million “mansions” in the coming years. Will hit the mark.
“What you are going to see is a shortage of inventory, because sellers don’t want to take a hit because of the tax. They don’t want to sell because they are on low interest rates and interest rates are very high,” says Carey, a listing agent at Pardi Properties Ann Sullivan said.
Sullivan believes that demand will continue to increase and that it will eventually help offset the cost of the new tax as well, but that will take roughly four to six months.
Meanwhile, “the next eight weeks will be very telling,” predicted Altman.
“But the deals I’m doing and negotiating and closing, these are deals that I never would have thought would close at prices as low as they do now.”
Sale ends Friday at 11:59pm PST.