Yahoo Finance 3 reasons why rich Californians like Mark Wahlberg and Dean Cain are selling their mansions and moving to Las Vegas. Is Sin City becoming the new high-end real estate capital?
Some of Hollywood's rich and famous like Mark Wahlberg and Dean Cain have left behind their Los Angeles digs for mansions off the casino strip in Las Vegas.
So is "Sin City" popular among rich Californians looking for change? You bet.
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Business Insider recently reported on this phenomenon and said the reasons people from other states are choosing Las Vegas include the cheaper cost of living, lower taxes, a plethora of outdoor activities outside the city and the proximity of charming and simple residential neighborhoods to a vast variety of entrtainment options.
Richard Katz, a 66-year-old optometrist who lived in Virginia for over 20 years, also mentioned the weather. "Texas is just not our cup of tea. Colorado, it's too much snow. Reno has too much snow. Seattle is too hilly and in California, everybody's moving from California to come here," he said. "No snowing, no blowing, and no mowing."
Recent reports and statistics suggest that rich folks have been leaving Cali in dramatic numbers. For instance, the non-profit Tax Foundation noted that about 27,300 fewer tax returns with an adjusted gross income of at least $200,000 were filed in California between 2020 and 2021.
Meanwhile, Los Angeles and San Francisco accounted for the highest number of homebuyers searching to move to Las Vegas from April 2023 to June 2023, according to Redfin.
Analysis from Home Builders Research cited by the Las Vegas Review-Journal says that the number of new Vegas luxury homes sold in the first half of 2023 was 267, a record high and three times the number in 2018.
“.. in my range of $4 million and higher, I’m still finding many people willing to buy because they are not currently affected by interest rates. They were already going to put a lot of money down on their house or to them the rate is tolerable because they are coming out of California and have a lot of equity from the home they sold there," said Dan Coletti, the owner of luxury custom builder Sun West Custom Homes, to the Las Vegas Review-Journal.
Read on to learn more about three big reasons why rich Californians may be more tempted than ever to leave their mansions behind.
Taxes
Only nine states in the U.S. don't have an income tax, and Nevada is one of them. Compare that to California, where taxes for the highest wage earners clock in at 14.4% — the highest rate in the nation. Nevada’s average combined state and local sales tax rate is 8.23%, slightly lower than the Golden State’s 8.82%.
So if you live in California and make $10 million, you could potentially wind up on the hook to the state for $1.44 million. Or you could bring your action across state lines to the Nevada side and not have to worry about bupkis on that front.
There’s another levy in particular that’s getting under the skin of the Los Angeles County's well-to-do: the so-called “Mansion Tax.” As of 2023, any property sale that exceeds $5 million subjects the seller to a 4% tax; if it surpasses $10 million, the rate jumps to 5.5%. Arguably, paying that tax could discourage selling — though it could just as easily prove the last straw for taxed-to-death Californians.
Read more: Here's how much the average 60-year-old American holds in retirement savings — how does your nest egg compare?
Quality of life
The kind of traffic jams that make L.A. driving a round-the-clock test of nerves simply don’t exist in Vegas, even if the summer’s Formula One racing event made a mess of local roads. Wahlberg also talks about Vegas as being a better place to raise his family. Really.
“You have Las Vegas, and people think automatically, 'Oh, the Strip,'” the actor told TODAY.com. “But [in] Nevada, there are wonderful communities. I live in a wonderful community that's really faith-based, great schools. There's much more to Las Vegas than the Strip."
Room to grow a (show) business
If you’re comparing California to Nevada as a business-friendly state, it’s hardly a contest in terms of tax structure, according to the Tax Foundation. It ranks the former as 48th on its 2024 State Business Tax Climate Index, while Nevada comes in seventh.
No wonder there’s the very real potential for Vegas to become a moviemaking hub just 90 minutes by plane from Los Angeles. Last year, Wahlberg appeared before the Nevada state legislature in support of SB 496, the Nevada Film Studio Infrastructure Act. Sony Pictures Entertainment, Birtcher Development and the Howard Hughes Corp. were also lobbying for it.
The bill, which would have granted $190 million in yearly tax credits, never made it to a vote. However, several sources told Variety that "the bill or similar legislation has a much better chance of passing when the next session happens in 2025."
Imagine that, and we’re betting Wahlberg’s peers already are: shoot a blockbuster by day, shoot craps at night and shoot home without the vagaries of bumper-to-bumper traffic and a hefty tax bill in the mailbox.
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This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
