Communist voters in Los Angeles passed a “mansion tax” in 2022, which imposes a new and burdensome tax on all high-end property sales. The tax just went into effect at the start of April. How’s it working out so far? About like you’d expect! Luxury home sales collapsed.
Measure ULA authorized the City of Los Angeles to impose a 4% tax on home sales worth more than $5 million, and a 5.5% tax on home sales worth more than $10 million. More than 60% of the genius voters in Los Angeles approved Measure ULA.
The measure was estimated to bring in $900 million per year, based on existing luxury home sales over the past umpteen years. That money was going to be used to subsidize rent for the poor and illegal aliens, to provide lawyers to tenants in eviction courts, and other pie-in-the-sky liberal policies.
In March, before the new tax went into effect, there were 126 homes sold in L.A. that were worth more than $5 million. In April, after Measure ULA went into effect, there were two (2).
The two properties that were sold generated $528,000 for homelessness and other programs. Instead of raising $900 million this year, the measure is on pace to raise $6.3 million. Oh, and everyone pulled their luxury homes off the market as soon as the tax went into effect. Who would want to sell their home if they’re just going to have the government shave another 5.5% off the top for themselves?
It’s amazing that the voters of Los Angeles thought that mansion owners wouldn’t act in their own self-interests. At least one legal group is suing the city to overturn the measure, arguing that it’s unconstitutional because it targets people unequally based on economics. The program’s dismal but totally predictable performance so far is also a good argument against it.