Jim Carrey’s $9M Loss: The Mansion Tax Effect!
Daniel Abram
?? Of Counsel @ElkinsKalt- I safeguard real estate investors with my counsel ?? Co-Founder @Reaf- the private network for people working in real estate acquisitions ?? Former real estate investment banker @GoldmanSachs
When you think of Jim Carrey, iconic roles like Ace Ventura, The Mask, and The Truman Show immediately come to mind. Over the years, Carrey, often described as a "funnyman" and a "Hollywood legend," has captured hearts with his eccentric performances. But, like many wealthy Californians, Jim Carrey is now facing a harsh reality — LA ’s mansion tax, which has forced him to repeatedly slash the price of his Brentwood home.
Carrey’s Brentwood Sanctuary
Jim Carrey’s breathtaking estate, 615 N Tigertail Rd, is in Brentwood, an affluent neighborhood in the Westside region of Los Angeles known for its serene, tree-lined streets and lush green spaces. Spanning 10,954 square feet, it sits on two private acres and boasts five bedrooms, nine bathrooms, and an array of luxury amenities including a waterfall pool, tennis court, custom Art Deco theater, yoga and meditation platform, and much more. It’s an entertainer’s paradise.
Carrey initially listed the home in February 2023 for $28.9 million, however today, he is asking for $19.75 million after multiple price cuts totaling $9.15 million. The house has been on the market for nearly two years, failing to attract buyers even with its allure. So, what’s driving this luxury home’s stagnation?
How the Mansion Tax Works
One primary reason is the “mansion tax” (Measure ULA), a real estate transfer tax that took effect in the City of Los Angeles on April 1, 2023. It imposes a 4% tax on the sale of homes valued over $5 million and a 5.5% tax on homes sold for over $10 million. This tax is in addition to the existing documentary transfer taxes (City & County) for all real estate transactions in Los Angeles. While the funds are intended to address affordable housing and homelessness, the impact on luxury homeowners has been dramatic. Many would-be home buyers are rethinking whether it’s worth buying a $5 million+ home in LA knowing they’ll end up with the same problem as Jim Carrey when they eventually sell.
For Jim Carrey, this means that if he successfully sells his home at the current asking price of $19.75 million, he could face a tax bill of over $1 million just from the mansion tax alone, not including other transfer taxes and closing costs. This is an additional financial sting in an already challenging luxury market.
Why the Mansion Tax is Crushing the Market
It’s no secret that the luxury real estate market has suffered since the mansion tax went into effect. According to reports, luxury home sales in LA have dropped by 68% since April 2023. This means that multimillion-dollar estates like Carrey’s are simply sitting on the market with no movement.
And this isn’t just a problem for movie stars. Wealthy residents across LA are feeling the pinch, leading to a mass exodus from not only LA, but also CA. High-profile residents, including Carrey, are eyeing states like Nevada, Texas & Florida, where taxes in general are more favorable. These states have no state income tax and offer a more tax-friendly environment for affluent homeowners looking to avoid California’s escalating tax burdens.
?A Case of Over-Taxation?
As a real estate lawyer, I’ve seen firsthand how California’s tax policies continuously chip away at homeowners, especially those in the luxury market. Although aimed at helping solve the homeless crisis, the mansion tax has proven to be yet another layer of financial burden for property owners. Supporters argue that the mansion tax is a necessary measure to address affordable housing, but critics (myself included) believe it has unintended consequences, stifling the luxury market and further driving people out of California.
The Future of California’s Luxury Market
The long-term effects of the mansion tax are already unfolding. LA’s luxury market, once a booming sector for multimillion-dollar transactions, has been dealt a significant blow. While the tax has successfully raised millions for affordable housing programs, it’s far from the projected amounts, and its chilling effect on the luxury sector cannot be ignored. As more homeowners flee the state and luxury properties fail to sell, the broader economic implications will become even more apparent.
Conclusion
Jim Carrey’s decision to sell his Brentwood estate and leave California highlights the growing dissatisfaction among the state’s wealthier residents. While LA’s mansion tax aims to solve pressing social issues, it’s also driving people away, leaving the luxury market reeling and homeowners like Carrey stuck in a tax trap.
For many, including Jim Carrey, the promise of a more favorable tax environment in states like Texas or Florida is just too good to pass up. And if taxes like the mansion tax continue to penalize homeowners, LA may continue to lose its wealthiest residents — one estate at a time.
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1 个月California's progressive income tax ranges from 1% to 13.3% for top earners which is the highest in the country. This is yet another reason not to live there!