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Two Los Angeles-area nonprofits paid more than $6M in taxes related to the city's so-called mansion tax that went into effect last year. Nonprofits are exempt from Measure ULA taxes when they are buying property but not when they are the sellers, executives at the organizations learned.
The Motion Picture & Television Fund charity organization sold $30M worth of land to a developer planning to build luxury senior housing on the site, the Los Angeles Times reported.
MPTF's housing serves 250 people at its Woodland Hills campus and subsidizes housing costs for roughly 70 of them. The organization sold about half of its campus to help raise money to continue its work but found that it had to pay $1.65M for the transaction.
“Why us? We never thought we’d be paying this tax,” MPTF CEO Bob Beitcher said.
It isn't the only one.
Los Angeles Jewish Health sold a senior living complex in Playa Vista for $81M and was unexpectedly hit with a roughly $4.5M tax.
United to House LA Director Joe Donlin told the LA Times that the rules were set up to incentivize sales to nonprofits.
The LA Times noted that “typically, nonprofits aren’t selling tens of millions of dollars worth of land, so the situation is somewhat rare.”
“No one imagined this scenario when the law was constructed,” MPTF's Beitcher said. “And we’re paying the price for it.”
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