With the introduction of a so-called “billion-won-long-term tax” in California, the U.S., there are signs that the wealthy are moving to neighboring Nevada. The ultra-high-priced housing market in Las Vegas, Nevada, which has no income tax and a relatively low property tax burden, is expanding.
The U.S. economic media Business Insider reported that the ultra-high-priced housing market is experiencing an unprecedented boom as billions of rich people, including Silicon Valley, choose to move to Las Vegas for tax burdens.
“The news from California accelerated this as the luxury housing market in Las Vegas was heating up,” said Ivan Scher, founder of luxury housing brokerage IS Luxury. “After COVID-19, 80% of our customers were from California, but the departure began at a much higher level after the billionaire tax bill was proposed.”
The number of millionaire households in the Las Vegas metropolitan area jumped 166% from 331 in 2019 to 879 in 2023, according to real estate data analyst RentCafe. Local brokers explained that the price is rising, with a series of sales of $11 million to $20 million in the market where a $10 million house was considered the highest price in the past.
The tax gap is mentioned in the background. According to Intuit, an accounting software company, California has an income tax rate of up to 14% or higher (including mental health service tax). Property tax is 0.68%, but Nevada has no income tax, and property tax is only 0.44%. If a billionaire tax system is introduced, which imposes a 5% tax on the rich with more than $1 billion at a time, the burden will be even greater.
According to Forbes, Hanky Group Chairman, who recently purchased a $21 million condo in Las Vegas, said the reason he chose to go to Nevada was because of the controversy over his billionaire position.
“I felt like I had become something I didn’t want,” he said. “I’ve already sent a lot of wealthy people and outstanding companies out of California. This trend will continue.”
Meanwhile, a unique protest against the introduction of a wealth tax was held in San Francisco, “March for Billionaires.”
Artificial intelligence (AI) startup founder Durick Kaufman hosted the protest, saying that the departure of the wealthy would lead to a decrease in California tax revenues, but only 20 to 30 participants and rather more reporters, according to the Wall Street Journal and IT media TechCrunch.
California Governor Gavin Newsom said he would block a bill to introduce a wealth tax.
SAM KIM
US ASIA JOURNAL
