Luxury Rentals Surge in Southern California Amid Mansion Tax and Market Struggles
With the introduction of a tax on luxury home sales and the challenges faced by the greater Los Angeles housing market, affluent property owners are seeking to rent out their mansions at astonishing prices.
High-End Rentals on the Rise
A prime example is a nearly 13,000-square-foot, seven-bedroom, 12-bathroom Manhattan Beach mansion, which the owner told Bloomberg he plans to rent for $150,000 a month. Rob DeSantis intends to lease the property for 90 days at a time, believing that doing so will showcase the property’s value more effectively.
While that figure may seem exorbitant, it is not the only property in Los Angeles listed for rent at such high prices. A five-bedroom, eight-bath Bel Air home is available for $55,000 per month, and a six-bedroom, six-bath home in Beverly Hills can be leased for $38,000 per month, according to Bloomberg.
Mansion Tax Impact
The so-called “mansion tax” equals 4% of the sale price on properties sold for $5 million or more in Los Angeles. Implemented on April 1, it will likely increase the price of luxury real estate in the region.
Challenges for Sellers and Landlords
Sellers and landlords in Southern California face various difficulties in selling or leasing their properties. Some issues are indicative of national trends, while others are unique to the area. One such problem is the lack of filming in Hollywood due to recent strikes. The strikes led to a halt in productions, affecting the rental of luxury properties for filming purposes.
Furthermore, sales in Southern California have been declining. Home sales in the Los Angeles area fell 26.6% in September compared to the previous year, as reported by Bloomberg, citing data from the real estate company Douglas Elliman.
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Orginal article: Link To Article – provided by Kansas City Realtors
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