On April 1, 2023, the “Mansion Tax” went into effect in Los Angeles. This newly implemented tax is already facing two lawsuits that could result in the city returning the money to taxpayers. Last week, both defendants agreed to consolidate their cases into one lawsuit in hopes of expediting the ruling.
The controversial newly imposed tax impacts transactions closed on any real property that is sold for more than $5 million within the city of Los Angeles. Read more in our most recent article here.
In anticipation of the tax, many buyers and sellers in Los Angeles completed sales prior to the implementation of the new tax with $1.3 billion in transactions from March 26–31, 2023. Sales then halted as of April 1. Investors are being encouraged to hold off on buying and selling homes with prices above $5 million, as many experts believe the plaintiffs in these lawsuits will prevail, or that The Taxpayer Protection and Government Accountability Act would end the mansion tax in Los Angeles and others like it if passed on the November 2024 ballot.
Ryan experts continue to be available to assist in navigating this new tax. Our team includes some of the most highly credentialed and experienced consultants in the industry. Contact us now.
TECHNICAL INFORMATION CONTACTS:
Scott Donald
Principal
Ryan
949.556.9001
scott.donald@ryan.com
Susan Orloff
Principal
Ryan
818.543.4760
susan.orloff@ryan.com
The material presented in this communication is intended to provide general information only and should solely be seen as broad guidance and not directed to the particular facts or circumstances of any individual who may read this publication. No liability is accepted for acts or omissions taken in reliance upon the content of this piece. Before taking (or not taking) any action, readers should seek professional advice specific to their situation from Ryan, LLC or other tax professionals. For additional information about this topic, please contact us at info@ryan.com.