A leading California luxury real estate executive, Aaron Kirman, has issued a strong warning regarding the state's proposed 'billionaire tax,' known as Proposition 40, stating that the measure is already chilling high-end real estate transactions and prompting top job creators to consider leaving California [1]. Kirman, CEO and founder of Christie’s International Real Estate Southern California, emphasized that ongoing tax proposals, including Proposition 40, are causing buyers and sellers to halt activity, which he believes could have far-reaching effects on the state's and even the global real estate market [1].
According to a recent UC Berkeley Citrin Center for Public Opinion Research-POLITICO poll, support for Proposition 40 has dropped to 45% among likely voters, with 43% opposed and 12% undecided, a decline from 50% support earlier this year [1]. Proposition 40, backed by the Service Employees International Union-United Healthcare Workers West, would impose a one-time 5% tax on certain assets exceeding $1 billion held by California residents as of January 1, 2026. The tax, generally excluding real estate, pensions, and retirement accounts, would be due in 2027, with the option to spread payments over five years at an additional cost [1].
Kirman argued that the uncertainty surrounding the tax, combined with inflation, elevated mortgage rates, and other state and local tax initiatives, has created a 'wait-and-see' environment among luxury buyers and sellers. He described the market sentiment as 'frothy,' with many buyers choosing to remain on the sidelines until there is more clarity [1]. Kirman also warned that if Proposition 40 passes, it could trigger a 'mass exodus' of billionaires and multimillionaires, noting that many are already considering relocating to states with more favorable tax climates [1].
No specific market reactions, such as changes in real estate prices or transaction volumes, were provided in the article. However, the overall tone from industry leaders suggests significant concern about the potential negative impact on California's luxury real estate market and broader economic environment if the tax is implemented [1].
CONCLUSION
The proposed billionaire tax in California is generating significant anxiety among luxury real estate professionals and high-net-worth individuals, with polling data showing declining public support. Industry leaders warn that the uncertainty and potential tax burden are already slowing market activity and could accelerate the departure of wealthy residents if enacted. The situation remains fluid as voters and market participants await further developments.