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The Most Expensive House in LA is Staring Down an April 1 Deadline Before the Seller Loses Money

The Most Expensive House in LA is Staring Down an April 1 Deadline Before the Seller Loses Money

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This LA mansion is staring down an April 1 deadline before the seller loses

Ten years after developers dubbed it "The One," the most expensive house in LA faces an April 1 deadline that must be met or else lose money. The 105,000 square feet Bel Air home will be auctioned off before then.

This property features an expansive moat, private running track, nightclub, movie theater, salon and spa as well as 10,000-bottle wine cellar. Plus it commands 360-degree views of Los Angeles, the mountains and Pacific Ocean.

The buyer

America's most expensive home, a Bel Air mansion once known as America's most expensive has been acquired by Richard Saghian - owner and CEO of Fashion Nova, an online women's retailer with annual sales exceeding $1 billion. For just $141 million, Saghian purchased the $141 million property.

Saghian will benefit greatly from this sale, as he owns several other high-priced homes in Los Angeles and invested millions into a Malibu beachfront property that's now worth more than $14.7 million.

Saghian knew immediately when he saw this Bel Air property, according to a real estate agent for The Los Angeles Times. The mansion boasts an outdoor basketball court themed after Kobe Bryant, car showroom and 70-foot infinity pool that appears to float above the mountainside.

Saghian isn't the only wealthy buyer competing to acquire this house. There are plenty of others in some of London's pricier enclaves who plan to purchase or sell before April 1 - when a new tax takes effect.

Aaron Kirman, a Compass broker who represents clients in the LA luxury market, believes there is an "urgency" to sell before this deadline. This trend mirrors what happened four years ago in New York when the mansion tax took effect.

He noted that due to the pandemic, many homeowners with properties priced over $5 million in Los Angeles are putting them on the market before April 1. Additionally, in Orange County where buyers sought safety from the crisis, there are currently 86 homes with price tags of $5 million or higher in escrow.

Aside from these expensive homes, many other properties have seen their value decrease compared to their original asking prices. A five-acre Beverly Hills estate was reduced from $135 million to around $75 million last year while a home in an affluent enclave near the Hollywood sign with a pool and movie theater has decreased 41 percent from its $105 million listing last year.

The seller

The owner of an extravagant LA mansion faces an April 1 deadline to sell the property at a reduced rate, or risk losing $6 million. He purchased it less than two years ago for $38 million and wants to offload before the new local mansion tax takes effect, which could add another $2 million to his cost.

In November, voters approved a local mansion tax of 4 percent on homes selling for $5 million or more. The city hopes this revenue will go towards funding affordable housing projects and homelessness prevention efforts.

According to real estate expert David Miller's analysis for CNBC, the rush to sell before April 1 in Los Angeles mirrors that experienced in New York four years ago when the mansion tax was first implemented. His calculations reveal that sales of luxury single-family homes worth $5 million or more totaled almost $2.5 billion last year.

Nile Niami, the developer who constructed this 21-bedroom, 49-bath hilltop mansion in Bel Air, owed around $110 million to a lender. As such, that lender filed for bankruptcy, leading to foreclosure on the home.

Niami, like other high-end sellers in Los Angeles, has a plan: He's willing to accept less than the original offer for the property. On Thursday afternoon, Concierge Auctions led an auction that set a record for highest ever paid at auction for a U.S.-built home - breaking its previous record of $126 million.

Kobe Bryant-themed basketball court, car showroom and 70-foot infinity pool that appear to float 45 feet above the mountainside are just some of the features this Beverly Hills estate has to offer. There's also an impressive foyer featuring a rotating sculpture by Italian glass maker Simone Cenedese; home cinema with Rolls-Royce starlit ceiling; multiple bedrooms; outdoor dining room with fire feature - all set against stunning mountain views!

The mansion tax

The owner of an opulent LA mansion faces a tight April 1 deadline to close on his purchase before being subject to a new local tax on homes over $5 million. If the buyer doesn't close by this date, they will have to pay the "mansion tax," which is set at 4 percent for properties over $5 million and 5.5% over $10 million.

Measure ULA, passed by voters in November, is intended to raise $900 million annually for affordable housing projects throughout Los Angeles. Supporters of this measure, known as "Measure ULA," say it will help combat homelessness in the city and provide additional funds for rent relief programs.

Opponents of the new tax, including top real estate agents, believe it will have an adverse effect on the housing market. They contend that it will slow down development and put undue stress on people involved in construction projects like plumbers and builders.

Pro-housing advocates believe the revenue will be put to good use, helping address the city's homeless crisis and create more affordable housing. According to UCLA's Lewis Center for Regional Policy Studies, a new tax would generate between $600 million to $1 billion annually in funding for affordable housing projects annually.

In addition to providing funding for affordable housing, the new tax will also assist the city in funding rent relief and other similar programs. According to the City Clerk's voter information pamphlet, 92 percent of the funds generated by this tax will go towards funding affordable housing projects and tenant assistance initiatives.

On April 1, a new transfer tax is set to go into effect for all real property transactions in Los Angeles, regardless of type or location. This tax will cover transfers that aren't exempt from the existing documentary transfer tax, such as gifts and foreclosures, proportionate interest transfers and change in control transactions.

Although this new tax will affect all real estate transactions that meet certain threshold values, it will primarily impact luxury single-family homes and multifamily residential properties. As costs have already escalated due to higher market rates and mortgage interest rates, owners of such properties will likely face even greater increases under this new tax, potentially placing downward pressure on their properties' values.

The deadline

Timing is key when it comes to purchasing or selling expensive real estate. And while the current banking crisis and economic uncertainty make now not the ideal time for trying to profit from a multi-million dollar mansion, some fortunate homeowners are doing just that - and reaping the rewards!

One owner made a savvy move by offering up a $6 million discount on his 16,700 square foot house that once sold for $44 million. Now listed at $38 million, the mansion will be subject to the new local mansion tax that goes into effect April 1.

Scott Feinberg of Los Angeles-based real estate agent Scott Feinberg is offering this home for sale. It features a sprawling main house, guesthouse and expansive pool deck area as well as an oversized Kobe Bryant basketball court and car showroom all situated on an undeveloped 260-acre Senderos Canyon parcel in Bel Air.

According to CNBC, the rush to sell before April 1 mirrors a similar activity in New York four years prior. While it remains uncertain if these actions will cause havoc with real estate prices, they certainly make for impressive sights. With such an enormous LA mansion, however, one must ask whether all this attention is worth it?

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