maybe they can't afford to move to Texas???
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Wealthy Los Angeles homeowners with an eye on selling their homes are reeling over a new “mansion tax” that could put them on the hook for millions of dollars as part of an effort to aid the homeless, realtors say.
Thanks to the passage of United to House LA, any resident selling their mansion at $5 million and above starting April 1, 2023, will pay a transfer tax of up to 5.5%. This means a $10 million home sale would equate to $550,000 in taxes — the price of a brand-new home in many states other than California.
Proponents hope to raise between $600 million and $1 billion a year to fund affordable housing for the homeless and low-income earners.
“About 32% of City renters are severely cost-burdened, meaning they spend over 50% of their income on rent,” the initiative said. “As families overspend on housing costs, they have less in their budget for health care, childcare, education, healthy food, savings and retirement, and other household costs.”
On Nov. 8, 58% of Los Angeles voters agreed that the wealthy should pay to fix the situation. Now, homeowners are scrambling to find ways to avoid the pricey new penalty, realtors told the Los Angeles Times.
“Rich people are very clever. They know how to manage cash, and they have time to look for loopholes,” said Bret Parsons, an agent at the Compass real estate company