Owners seemed to have been rushing to sell their properties in California recently as the new 'mansion tax' went into effect.
The plan is for the funds raised from that tax to go toward the homeless issue. However, critics have suggested that it might just be an empty promise and do little to help things, even possibly making it more expensive for properties to be built to address housing issues.
A number of celebrities have been reported as working recently to sell their homes in California ahead of the changes, some even aggressively lowering the cost to sell it before the new tax went through. Some were even offering incentives like luxury sports cars to try and increase chances of selling.
Some real estate industry experts have suggested that this will have a big negative impact on the market. It has been reported that about 92% of the funds raised from that tax are destined to go toward funding affordable housing but people in cities around the world have been hearing about unmet promises of more affordable housing for years, as homeless populations grow especially in areas around places like California.
They suspect that it could raise some $600 million to possibly $1 billion or more each year. That is expected to vary though depending on what properties get sold.
pics: pixabay
This is not financial advice, this has been posted for information purposes only.
Sources:
https://www.theguardian.com/us-news/2023/mar/31/los-angeles-mansion-tax-realtors-sell-off-frenzy
https://nypost.com/2023/04/01/las-new-mansion-tax-is-an-empty-promise/
https://www.foxbusiness.com/real-estate/million-dollar-listing-star-warns-ca-mansion-tax-deliver-hardest-hit-since-2007
https://ktla.com/news/local-news/los-angeles-mansion-tax-has-sellers-throwing-in-free-sports-cars-to-entice-buyers/