Luxury Los Angeles homeowners are renting out their properties for up to $150,000 a month amid new mansion tax and entertainment industry turmoil
- Luxury homeowners in Los Angeles are renting out their properties at exorbitant prices amid a new mansion tax that is slowing the premium sales market
- Upscale homes in California’s largest city are being offered for up to $150,000 a month as vacation villas or corporate event venues.
- This comes after luxury home sales in Los Angeles fell by 26.6% due to the “mansion tax” imposed earlier this year on properties costing more than $5 million.
Luxury homeowners in Los Angeles are renting out their properties at exorbitant prices amid a new mansion tax that is slowing the premium sales market.
Upscale homes in California’s largest city are being listed for up to $150,000 a month as vacation villas or corporate event venues.
This comes after luxury home sales in Los Angeles fell by 26.6% due to the “mansion tax” imposed earlier this year on properties worth $5 million.
The tax also exacerbates the impact of labor strikes on the region’s normally thriving entertainment industry, meaning there are fewer celebrity buyers.
Arriba founder Rob DeSantis He’s offering his seven-bedroom, 12-bathroom Manhattan Beach home to renters for $150,000 a month, after listing the property this week.
DeSantis, 60, who was an early investor in LinkedIn Corp and owns five properties in California, called the move a “hedge.”
“I think renting it out will highlight the value of the property in a much better way,” he told Bloomberg.
The most expensive property currently listed for rent in Los Angeles on Sotheby’s Realty is a gated estate in Beverly Hills, costing $65,000 per month.
Located at 407 Robert Lane in the exclusive Trousdale neighborhood, the property features nine bedrooms, 12 bathrooms, a tennis court and a pool.
Its impressive white marble entrance is decorated with giant chandeliers and immaculate furnishings, and the house also includes wood-panelled Mediterranean-style rooms.
Home sales in the area are down 26.6 percent this year through September compared with the previous 12-month period, according to a Bloomberg analysis of broker data.
With a median price of $13.25 million, Los Angeles luxury home listings stay on the market for an average of 73 days — twice as long as a single-family home.
There are several mansions on the market with a total value of about $3 billion, according to LA Estate Rentals founder Patrick Michael, who told Bloomberg that luxury homeowners are in “panic mode.”
Among them is a plastic surgeon who was asked to find clients to rent a house in the Hollywood Hills, which he often rents for $25,000 a day for corporate events.
Los Angeles’ “mansion tax” went into effect April 1, allowing the city to deduct four percent of gross home sales between $5 million and $12 million.
For mega mansions that exceed the $10 million threshold, homeowners lose 5.5% of the sale price if they decide to leverage their properties.
The move slowed luxury sales almost to a halt during the first month, with only two properties costing more than $5 million sold in April, compared to 126 in March.
According to real estate valuation website Zillow, 457 mansions were scheduled to be subject to the new tax rules when the policy was first imposed.
Los Angelenos voted to approve a new mansion tax in November, which was expected to raise between $600 million and $1.1 billion each year.
The money is slated to go toward affordable housing and renter assistance programs in the area, drawing money from every housing sale valued at more than $5 million.
Among the most luxurious homes remaining on the Los Angeles real estate market is an $85 million listing dubbed “The Reserve.”
Set on over 21,000 square feet of manicured landscaping, the exclusive estate is located at the end of a winding driveway through the Holmby Hills community of California.
Surrounded by towering palm trees and lush forests, the architectural gem boasts 10 bedrooms, 19 bathrooms and 20 garage spaces for a fleet of luxury cars.
The on-ground swimming pool is connected to a tennis court and a large pavilion.
Built in 1959, the main house is a unique one-story residence equipped with five bedrooms, floor-to-ceiling windows, and classic Italian finishes.
It is accompanied by a stunning guest house that parallels the main mansion, which also includes five bedrooms and stunning views of the Los Angeles coast.
The Reserve is equipped with many luxurious amenities, also including an Art Deco Hollywood-inspired bar, a 1920s French Regency-style cinema, a spa and a private gym.
But because it failed to sell before the April 1 deadline, the city of Los Angeles will now get a nice $4.6 million share of the future sale.
Rivaling the preserve as one of the most expensive properties on the West Coast is a $69 million mansion located in the heart of Santa Monica.
The most striking feature of the sprawling, resort-like home is a 125-foot swimming pool, joined by seven bedrooms and 13 bathrooms.
Located next to the exclusive Riviera Country Club, panoramic views of the California oasis are enjoyed throughout the stately home.
For the hefty price, any new owner will enjoy amenities including a private spa, home theater and indoor basketball court.
A water feature welcomes guests to the expansive garage with enough space for 30 vehicles, while the interior is decorated with clean white finishes, a spacious library and a massive dining room table that can seat 25 lucky guests.
But the Los Angeles mansion tax is set to take in roughly $3.8 million from any future sale.
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