Million-Dollar Home Taxes: A Warning for Lakewood Across the country, cities and states are experimenting with new taxes on so-called “luxury” homes. The pitch is simple: target properties above a certain value, often $1 million or more, and funnel the money into local programs. But the reality is far more complicated—and the impacts often hit ordinary homeowners, not just the wealthy. Examples nationwide • Los Angeles voters approved Measure ULA in 2022, adding transfer taxes on sales over $5 million. The city projected $600M annually but collected under $200M in the first year. A UCLA study found multifamily housing production dropped about 18% after ULA • Chicago’s “Bring Chicago Home” referendum failed in March 2024, 52.3% to 47.7%, after voters rejected a tiered transfer tax proposal • Washington State raised its Real Estate Excise Tax (REET) to 3% on the portion of sales above $3.025M • New York State imposes a 1% mansion tax on sales above $1M and an additional graduated surcharge on properties above $2M • New Jersey adjusted its mansion tax in 2025, shifting liability to sellers and expanding applicability • Connecticut charges a 2.25% marginal conveyance tax on the portion of home sales above $2.5M • Santa Fe voters approved a 3% transfer tax on home sales above $1M, but a judge later struck it down as unconstitutional under state law • Honolulu assesses higher property tax rates on non-owner-occupied homes above $1M under its “Residential A” classification • Rhode Island enacted a statewide “property wealth...
