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8 months ago
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Luxury home sales in Los Angeles have been decimated by the so-called 'mansion tax' one year since it came into effect.
Launched April 1, 2023, the policy levied a four percent tax on all $5 million to 10 million property sales, while funds were programs for the homeless.
But one year later, the Measure ULA strategy has seen luxury house sales drop by 68 percent, while raising only 22 percent of its stated goal.
Some 366 single-family homes were sold in the 12 months before April 1, 2023, versus 166 sold in the year since, according to the Los Angeles Times.
Local real estate developer Hooman Ghaffari blasted the policy as 'a sham' that has 'yet to come close to meeting stated goals' while making new developments 'financially unworkable'.
One breathtaking mansion within a gated estate in the affluent LA suburb of Tarzana has dropped $2.9 million, from $17.9 million in July 2023 to its current price of $15 million according to listings
Another stunning sun-soaked property, located in the coveted neighborhood of Encino, was devalued by almost $1 million from $12.9 million in July 2023 to just over $11.9 million today
Pictured: homes over $5 million are now more heavily clustered outside the levied metro area
LA's Housing Department has generated $215 million from the tax over the past year - a disappointing sum compared with the $900 million it was predicted to raise.
The city has defended the policy as something which will take time to gain traction, saying income from the tax snowballed toward the end of the first year.
On top of the four percent tax on properties over $5 million, for mega mansions that break the $10million threshold, homeowners lose 5.5 percent of their sale price if they decide to cash in on their estate.
A quick peruse of LA's current housing listings for properties in the 'mansion tax' danger zone - those listed at $5 million or more.
One breathtaking mansion within a gated estate in the affluent LA suburb of Tarzana has dropped $2.9 million, from $17.9 million in July 2023 to its current price of $15 million according to listings.
Despite coming complete with a private entrance, marble fire place, large heated pool, spa tub, outdoor pavilion, tennis court and wine cellar, its been on the market for 270 days.
Stunning drone footage of the 4.12-acre lot shows the pristine turret-roofed home is surrounded by pristine lawns and towering conifers which protect its privacy.
Its wood-paneled interior boasts six ginormous bedrooms, seven bathrooms and a bathtub with jets.
Realters for an beachside five-bed property (pictured) in the Pacific Palisades have slashed its price by $605K from $7.6 million in May 2023 to $6.995 million now
The beautiful home features high ceilings, a large private pool, and stunning views of the ocean and surrounding mountainside
A Mediterranean-style mansion in Los Feliz valued at $7.25 million in November 2023 also tanked to $6.89 million in March 2024
Another stunning sun-soaked property, located in the coveted neighborhood of Encino, was devalued by almost $1 million from $12.9 million in July 2023 to just over $11.9 million today.
The six-bed 11-bath property sports floor-to-ceiling windows and luxury open-plan interior complete with surround-sound speakers, and is surrounded by towering oak trees.
Meanwhile, realters for an beachside five-bed property in the Pacific Palisades have slashed its price by $605K from $7.6 million in May 2023 to $6.995 million now.
The beautiful home features high ceilings, a large private pool, and stunning views of the ocean and surrounding mountainside.
A Mediterranean-style mansion in Los Feliz valued at $7.25 million in November 2023 also tanked to $6.89 million in March 2024.
Greg Good, a senior advisor on policy and external affairs for the office's Housing Department, defended the 'mansion tax' by saying the gains would snowball soon.
He told the Los Angeles Times that the money it had raised had increased month-by-month, from an average $15 million per month in the first quarter, to roughly $25 million per month from July 2023 to February 2024.
Good said around $28 million had been spent on aid for distressed tenants and landlords, and $56.8 million on loans to expedite the development of affordable homes.
The policy was expected to raise between $600 million and $1.1 billion annually to fund a range of affordable housing projects and support the city's 40,000-strong homeless community
By March, a report from the City Administrative Office lowered estimates significantly down to $672 million from July 2023 to June 2024
'None of that happens without ULA,' he told the Los Angeles Times.
When the plan was approved last year, Los Angeles Mayor Karen Bass touted it is the way forward for funding 'real solutions that will help keep people in their homes and create more affordable housing'.
DailyMail.com has contacted the mayor's office for a comment on the progress one year on.
Just before the policy was implemented, LA's wealthy homeowners moved to avoid the new transfer tax by selling their homes en masse in March 2023.
House prices were slashed and frightened sellers offered luxury cars and lucrative bonuses to anyone who could complete the purchase by the end of the month.
The policy also sparked the rise of the $4.999 million home
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