Los Angeles voters deciding on 'mansion tax'
The proposed tax would impact transactions above $5 million
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Los Angeles voters are deciding as they head to the polls Tuesday whether the city should adopt a so-called "mansion tax" on property sales or transfers over a certain value to pay for affordable housing.
The proposed Measure "United to House LA" (ULA) seeks to establish a 4% documentary transfer tax on sales or transfers of property above $5 million but below $10 million, according to the city clerk’s voter information pamphlet. For property sales or transfers valued above $10 million, the proposed tax would be 5.5%.
Los Angeles skyline, March 2, 2017.
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Nonprofits, qualified affordable housing organizations, government agencies and certain others would be exempt, according to the text of the proposal.
At least 92% of the money would "fund affordable housing under the Affordable Housing Program and tenant assistance programs under the Homeless Prevention Program," according to the voter information pamphlet.
Aerial view of the business district in downtown of Los Angeles. (iStock) (iStock)
The Los Angeles city administrative officer estimated the proposed tax could generate $600 million to $1.1 billion in revenue each year. However, he noted it would "fluctuate" based on how many property transactions with values within the scope of the tax actually occur.
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A UCLA examination of the proposal found about 4% of real estate sales and transfers in the city would be impacted each year. Nearly three-quarters of the money the proposed tax would raise would come from transactions worth over $10 million, according to the authors, who also wrote it would "primarily impact large real estate companies."
A new home for sale in Madison, Georgia, on Feb. 18, 2021. (AP Photo/John Bazemore, File / AP Newsroom)
Supporters of Measure ULA have argued it will help reduce homelessness in the city and protect individuals at risk of homelessness. Meanwhile, others have argued it could contribute to higher housing prices and create more bureaucracy.
States and other cities have previously instituted their own versions of so-called "mansion taxes."
New York City implemented one a few years ago, and Connecticut also has its own.