New Los Angeles, California Mansion Tax Faces Lawsuits
Scott Donald, Principal 949.556.9001 | scott.donald@ryan.com
Susan Orloff, Principal 818.543.4760 | susan.orloff@ryan.com
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.