iThe purchase, and the tax on it
Record sales make news. The Tadao Ando house in Malibu, reported in 2023 to have sold for around $200 million, briefly set the bar for California. But the price is followed immediately by transfer taxes, and in some cities these have grown sharply.
In Los Angeles, Measure ULA, often called the "mansion tax", took effect on 1 April 2023. It adds a 4% tax on sales above $5 million and 5.5% above $10 million, with thresholds adjusted annually. On a $20 million sale, that is around $1.1 million, on top of standard county and city transfer taxes. In England, Stamp Duty Land Tax reaches 12% on the portion of a residential price above £1.5 million, with additional surcharges for second homes and some overseas buyers.
iiCarrying costs
Once the keys change hands, the meter starts. In California, Proposition 13, passed in 1978, sets the base property tax rate at 1% of assessed value, with annual assessment increases capped at 2% until the property sells. Local levies push the effective rate higher. A $20 million purchase therefore implies a property tax bill of roughly $200,000 or more each year.
Maintenance is harder to pin down. Property managers often quote a rule of thumb of 1% to 4% of a home's value per year, with the upper end common for older estates, coastal homes exposed to salt air and properties with extensive grounds.
iiiThe household staff
- Estate or house managerRuns the budget, the staff and the contractors. Experienced managers in major markets typically command six-figure salaries.
- Private chefFull-time or per event; often the person most closely tied to the daily routine.
- HousekeepingA team rather than a single person, rotating across laundry, rooms and guest preparation.
- SecurityCameras, monitoring and, for the most visible households, round-the-clock personnel.
- Grounds and poolGardeners, arborists and pool technicians, usually on contract.
ivAn illustrative annual ledger
The table below is a hypothetical annual budget for a $20 million home in Los Angeles. It is not based on any specific property or person. Real costs vary widely with size, age, location and staffing choices.
| Line | Basis | Estimate |
|---|---|---|
| Property tax | About 1.1–1.2% of assessed value | $220,000–$240,000 |
| Maintenance and repairs | 1–2% of value | $200,000–$400,000 |
| Homeowner's insurance | Varies sharply with wildfire risk | $60,000–$200,000 |
| Household staff | Manager, housekeepers, chef | $400,000–$900,000 |
| Security | Systems, monitoring, personnel | $100,000–$600,000 |
| Utilities | Pools, climate control, lighting | $40,000–$90,000 |
| Grounds | Gardens, trees, irrigation | $50,000–$150,000 |
Even at the low end, the yearly total passes $1 million. That is why many owners hold properties through trusts or companies, run them like businesses and sell when a house no longer fits the life.
vInsurance and the climate question
In California and parts of Florida, insurers have withdrawn from or limited new policies in high-risk areas, pushing some owners toward the state's insurer of last resort or specialist high-value carriers. Fire-resistant materials, defensible space and private water storage are now part of luxury design, not an afterthought.
viThe ordinary detail
Strip out the zeros and the logic of a celebrity household is familiar: a fixed set of bills, a few people you rely on and repairs that never quite end. The difference is scale, and the fact that the image of effortlessness has a line in the budget of its own.
Figures are illustrative and for general information only. Nothing here is financial, tax or legal advice; tax rules change and should be checked with a qualified adviser.