The Mansion Tax Effect: Luxury Home Sales Stall in Los Angeles

“The flurry of activity that happened up until April 1 was pretty phenomenal,” says real estate attorney Loretta Thompson, a partner at Withers Worldwide. Verdant Properties’ John Iglar argues that it is a fundamentally ill-conceived transfer tax, which punishes sellers since they are responsible for reporting and paying the tax. “A buyer purchasing a $10 million house is wealthy at the time of purchase, so a tax on them is truly a tax on the wealthy. It is also shifting the balance of power in luxury real estate, long a seller’s market. “I’m eternally optimistic about Los Angeles real estate,” Thompson says.