The tax, called Measure ULA, will require sellers of properties of more than US$5 million (approximately £4 million) to pay a four per cent transfer tax.
It will also require sales of more than US$10 million to pay a 5.5 per cent tax, with all funds raised going towards public housing. The city aims to raise up to US$1 billion from these sales in an effort to tackle the growing homelessness crisis.
Measure ULA was passed with 57 per cent of the vote in November 2022, after housing advocates and labour unions campaigned to get it on the ballot. But it faced backlash from real estate agents, who warned it would cause a “frenzy” of sell-offs among the wealthiest homeowners.
Celebrities including Jim Carrey, Britney Spears and Kylie Jenner have all put their sprawling properties on the market in recent months.
Carrey’s home, which spans across 12,700 square feet, went on the market in February for US$29 million, while Spears reportedly put her 11,650 square foot home in Calabasas on the market for US$12 million just six months after she and husband Sam Asghari purchased it.
It was first reported in October that Jenner put her Beverly Hills home, which she owns with partner Travis Scott, up for sale for more than US$33 million. The couple bought the seven-bedroom, 10-bathroom property in 2018 for US$20.4 million.
Mark Wahlberg put his 30,500 square-foot mansion in Beverly Hills on the market last April, well before the measure was introduced. However, he dropped the asking price from US$87.5 million to US$79.5 million in November, and finally found a buyer in February this year.
Tyrone McKillen, a broker from luxury agency Official, told The New York Times that Measure ULA “created a bit of a frenzy, with people trying to beat the 1 April date and lots of opportunities for buyers looking for value”.
Another broker, Josh Altman, added to The Telegraph: “I’m seeing deals get done that should never have [been] done.”
Measure ULA campaigners say the tax will help reduce homelessness in the city, as well as provide financial assistance to low-income senior citizens and make housing more affordable.
California has the highest rate of poverty in the US. In 2022, an estimated 42,000 people were homeless, compared to 28,000 in 2016, according to figures from the Los Angeles Homeless Services Authority.