Millionaire home sellers are slashing prices and sweetening deals this week in Los Angeles, eager to move their properties off the market before a new

For Sale: Mansions in Los Angeles at Bargain Prices

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2023-03-24 08:00:04

Millionaire home sellers are slashing prices and sweetening deals this week in Los Angeles, eager to move their properties off the market before a new real estate tax aimed squarely at the rich goes into effect on April 1.

In November, Los Angeles voters backed Measure ULA, a transfer tax on big-ticket property sales that the city says will generate a new revenue stream for affordable housing projects and homelessness prevention. Known colloquially as the “mansion tax,” Measure ULA will impose a 4 percent tax on property sales above $5 million, and a 5.5 percent tax on properties above the $10 million mark.

The city’s homelessness crisis has ballooned in recent years: Tent cities have popped up in parks, on sidewalks and under freeways. An estimated 42,000 people were homeless in the city of Los Angeles during a point-in-time canvas in February 2022, according to Los Angeles Homeless Services Authority. In 2016, the number was closer to 28,000.

A coalition of housing advocates and labor unions campaigned to put Measure ULA on the city’s Nov. 8 ballot, and the measure passed with 57 percent of the vote. Its proponents initially estimated that the tax would raise up to $1.1 billion for affordable housing initiatives, but this week the city lowered that estimate to $672 million.