LAs mansion tax backfires spectacularly as thousands of homes and jobs vanish

LA’s “mansion tax,” sold to Angelenos as a way to tax the rich and boost housing, has instead blocked the building of 9,100 homes, wiped out 16,650 full-time construction jobs and cost $452 million in revenue.A damning new report says the tax, officially known as United to House LA, or ULA — has had a negative impact on the city’s high-end and multi-family real estate markets and collected less than half what it was expected to generate to tackle the city’s housing crisis.The ULA was expected to raise about $900 million a year, or $2.7 billion over its first three years.Instead, it brought in about $1.2 billion.The tax — which went into effect in April 2023 and was championed by socialist mayoral hopeful Councilwoman Nithya Raman — means if a property in LA sells for more than $5.4 million, the seller is taxed 4% of the price at closing.

If it sells for more than $10.9 million, it increases to 5.5%.Despite its nickname, LA’s “mansion tax” applies far beyond luxury homes.Apartment buildings, offices, warehouses and vacant land can all trigger the tax if they sell above the thresholds.About 1,000 of the 9,100-plus new homes lost would have been affordable units — the very thing the tax was supposed to create — according to RAND corporation, a non-partisan, nonprofit research group.Westside real estate broker Danny Brown told The California Post the tax was ”another disaster initiated by the incompetent socialists who run our city.”“ULA has chopped the legs from under the residential and commercial real estate industry, which is one of the largest parts of our city’s economic engine,” Brown said.Mayor Karen Bass did not take a position on the mansion tax, but Raman has since said she was in favor of reforming the tax.RAND found the ULA slashed high-value property sales by an estimated 31% through early 2026, with apartment and commercial sales falling by more than 46%.Simply put, the tax has discouraged some owners from selling and...