Bryan Charap Chief Financial Officer | realtors.com
Los Angeles real estate agents are urging the city to halt its "mansion tax" in light of recent wildfires that have devastated some of the city's most expensive properties. A letter was sent by brokers Jason Oppenheim and Ben Belack, representing nearly 50 other high-profile agents, to city and state officials. The letter proposes suspending the mansion tax on damaged property sales and increasing insurance payout limits to $6 million.
"In the spirit of rebuilding, we are calling for practical adjustments to laws, regulations and building codes for those most affected by this disaster," wrote Oppenheim and Belack. They addressed California Governor Gavin Newsom, Los Angeles Mayor Karen Bass, and relevant regulatory agencies.
The brokers highlighted a shortage of available insurance for homeowners in California due to national insurers withdrawing from the state. "Everyone’s underinsured," Belack told Mansion Global. He noted that many homeowners accepted whatever insurance they could afford without realizing it might be insufficient.
The California Fair Plan currently insures homes up to $3 million but does not cover many high-value properties in areas like Malibu and Pacific Palisades. The brokers requested raising this limit to $6 million and offering liability insurance while encouraging insurers' return.
Additionally, they proposed suspending the ULA transfer tax—known as the mansion tax—for up to five years on destroyed property sales. This tax applies higher rates on trades above $5 million, with funds directed towards homelessness and affordable housing initiatives.
"Exempting developers from the transfer tax for five years will encourage them to purchase land from homeowners at reasonable prices and quickly rebuild these devastated communities," stated the letter.
Other suggestions included easing regulations that could delay rebuilding efforts due to Los Angeles's complex permitting process.
Executive orders by Newsom and Bass have partially addressed these concerns. Newsom's order suspended certain building codes, while Bass's order aimed at streamlining approvals for utilities and occupancy certificates.
"Both Newsom and Bass have issued orders that go to the heart of some of our requests...but there is still much left on the table," Oppenheim said via email. Taxes and insurance remain unaddressed issues according to Belack.
The governor’s office has yet to respond directly to their proposals or Mansion Global's request for comment.
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