Mansion Tax Has Los Angeles Luxury Home Owners Offering Buyers Drastic Price Drops
Edited by: TJVNews.com
Seems like multimillionaires who want to purchase a home in the Los Angeles area are pretty optimistic these days that they may land a great deal. The real estate market in the City of Angels seems to be winking in their direction.
It is most definitely a buyers market, even though on a national level the real estate market might be cooling down to the economic woes that the country is grappling with.
The New York Post recently reported that the so-called “mansion tax” that went into effect Saturday in Los Angeles, adding a 4% tax for sellers on homes that sell for between $5 million and $10 million and 5.5% on amounts $10 million and above.
For sellers, they are incredibly motivated to close deals with interested parties and in order to sweeten the proverbial pot, they are throwing in brand new Bentleys and McLarens and drastically slashing prices in order to incentivize prospective buyers, the Post reported.
This past November, Los Angeles voters passed a homeless housing measure and the Post reported that the change will add hundreds of thousands — if not millions — of dollars in additional new transfer taxes for sellers, which will go to support the measure.
As such a bevy of top celebrities and other highly affluent types have been exceptionally eager to sell their homes in the last several months. Such celebs include actors Jim Carrey and Mark Wahlberg as well as pop diva Cher, who just reduced the price of her gothic Malibu estate from $85 million to $75 million. While the oceanfront mansion has been on the market before, it appears that Cher is eager to sell it. The iconic singer, 76, is in a romantic relationship with rap music record executive Alexander Edwards who is 39 years her junior.
In February, Carrey decided to sell his 12,700 square foot Brentwood, Los Angeles home after residing there for 30 years. The actor listed it for $29 million but the Post reported that there are no prospective buyers as of yet.
Also in February, singer/actress Jennifer Lopez who recently wed long time love interest Ben Affleck put her Bel Air home on the market, according to the Post report.
Another celeb who reduced the asking price for his Brentwood Park home was British talk show host and comedian James Corden. The Post reported that his original asking price for his home was $22 million and he dropped the price to $17.95 million.
As for actor Mark Wahlberg, the Post reported that he had put his 30,500 square-foot estate on the market months prior to the measure’s passage, at a staggering $87.5 million but ended up selling the Beverly Park property for $55 million in February, a 37% price drop.
Speaking to the Post was Josh Altman, a luxury broker with Douglas Elliman in Los Angeles who regularly appears on Bravo’s “Million Dollar Listing.” “It’s crazy out there right now,” he said.
Multiple brokers told The Post they felt Wahlberg could have done better, if not for the looming deadline of that multimillion dollar tax bill he would have faced starting this April Fool’s Day.
Speaking of how sellers are seeking to entice buyers, Altman told the Post, “I’ve literally become not only a real estate agent, which I signed up for, but I’m now a yacht salesman, a car broker and a wholesale furniture salesman. That’s what it’s come down to.”
Altman also told the Post that after two decades in the real estate business, he’s had the record month of his career, despite otherwise lackluster home sales numbers across the nation. He also said that in the last few days he has closed about 20 deals.
Altman also told the paper that, “People need to get as creative as possible to motivate the buyer to close before this tax goes into effect. A lot of times it’s … a cut-your-losses type of approach. Maybe [throwing in] a Lamborghini that costs $350,000 … is going to save you from paying $600,000 in taxes, so you might as well do it.”
In an attempt to sell a seven-bedroom mansion in Bel Air that was listed at close to $28 million, Altman said that he even offered a $1 million bonus for a buyer’s agent on top of the regular commission, the Post reported. He added that the mansion isn’t going to close in time to meet the deadline as it went into counter offers.
While it went into counter offers, the home isn’t going to close in time to meet the deadline, he said.
Also speaking to the Post was Tatiana Derovanessian, a luxury agent with Keller Williams in Beverly Hills. She said that the “mansion tax” has led to quite a few “Hail Mary” marketing approaches.
A five-bedroom, eight-bath mansion on Mulholland Drive in Beverly Hills is going for $16.5 million and you can get the “the luxury home and the luxury vehicle of your choice, within the fleet that we have through O’Gara Coach Co., a Beverly Hills luxury car dealer.”
The deal includes vehicles priced up to roughly $400,000, including an Aston Martin Vantage, Aston Martin DBX 707, McLaren GT or Bentley Bentayga EWB, the Post reported.
Derovanessian told the Post, “The strategy was to create an offering to a buyer in this range that loves a luxury vehicle, luxury home, that has maybe luxury watches, luxury yachts. She noted that the home itself is “a car home” with a 1,300-square-foot subterranean “auto gallery.”