Foreign Cash Pours Into L.A. Luxury Real Estate as California Billionaires Flee Proposed Wealth Tax

California's proposed wealth tax might be fueling an outflow of billionaires toward friendlier tax hubs like Florida and Nevada, but global buyers are doubling down on Los Angeles.

In the wake of the devastating wildfires that scorched Southern California in the first weeks of 2025, international demand for luxury homes in L.A. began climbing, reaching 18.2% by the end of December, before edging down during the first three months of the new year, according to a new cross-market demand data analysis from Realtor.com®.

"At its peak, nearly 1 in 5 luxury home shoppers in the L.A. metro was looking from abroad, reflecting the metro's draw for high net worth individuals who view Southern California as a destination for residency, second homes, investment properties, and those seeking a form of wealth preservation," says Realtor.com® senior economist Anthony Smith.

Despite the marginal dip in foreign interest since the start of the new year, L.A.'s trophy properties remain a primary target for global capital.

Nicole Plaxen, co-founder of the Walters | Plaxen Estates team at Sotheby's International Realty, tells Realtor.com that last week, she spent eight hours showing properties to a Brazilian family with an $80 million budget, and at the end of March, she was out with a Japanese investor who she says ended up buying multiple homes in L.A.

"Los Angeles created such a unique ecosystem within the entertainment industry, within the tech industry," says Plaxen. "You're close to everything here: You're an hour from the beach, you're an hour from the desert, an hour from the mountains."

According to the agent, her typical overseas clientele looks to invest $50 million and more in L.A. real estate, with a strong preference for all-cash transactions. These global shoppers are mostly drawn to large, modern mansions and new builds to be used as primary residences or second homes and investment properties.

While there is no data immediately available directly attributing cash purchases to foreign buyers in Los Angeles, the National Association of Realtors® reported in July that nearly half of all foreign buyers acquiring real estate assets in the U.S. paid all-cash to bypass high interest rates, compared to just 28% of domestic buyers.

Realtor.com data analysis indicates that, at the start of the year, Canada accounted for the largest share of international listing views in L.A. (29%), followed by the U.K. (10%), Australia (8%), Germany (6%), and Mexico (3%).

Plaxen says she recently received a call from a wealthy potential buyer from Australia inquiring about an ultraluxury L.A. property with a staggering $100 million price tag as he prepares to expand his business to the U.S.

California's economic boom

Foreign investors' sustained interest in L.A. and California should come as no surprise: According to new data, the Golden State, which is home to 39 million people, has just supplanted Japan—a nation of 123 million—as the world's fourth-largest economy.

According to data compiled by Bloomberg, since Gov. Gavin Newsom, a Democrat, first took office in 2019, California's gross domestic product soared 40% to more than $4 trillion, while the GDP of China—the world's second-largest economy—rose just 32% during the same interval.

In March, Los Angeles emerged as the nation’s second-most expensive luxury market among the 50 largest metros, trailing only Bridgeport, CT, according to the latest luxury housing report from Realtor.com. With the top 10% of properties starting at $4.25 million, the California city's entry-level luxury price point now stands at more than three times the national median.

Even with such a high barrier to entry, international appetite for prime L.A. real estate shows no signs of waning.

"Los Angeles remains a safe-haven market for global investors," Victor Currie, real estate agent at Douglas Elliman Real Estate, tells Realtor.com. "As much as it feels overpriced by average housing standards, we can be thought of as a relative bargain compared to other major cities like London or Sydney or Hong Kong."

For global home shoppers, the strength of Los Angeles' real estate market makes buying property in town a solid long-term investment, Currie says.

"The wealthy international buyer is really drawn by the same things as wealthy American buyers," explains Currie. "The best mix of lifestyle, weather, culture, and global financial power, all in one place. There are plenty of luxury markets that have two or three of the four, but not many that can compete on all those categories."

The Douglas Elliman agent notes that the majority of luxury buyers in L.A. are still domestic, but foreign buyers are much more likely to pay all-cash.

Proposed wealth tax targets billionaires

Meanwhile, some of California's wealthiest local property owners have been heading for the exits, spooked by a proposed wealth tax that could go before state voters in November.

The ballot initiative championed by a union calls for California residents with a net worth of $1 billion or more—about 200 residents in all—to pay a one-time tax equivalent of 5% of their assets.

With residency determined as of Jan. 1, 2026, California billionaires had only a narrow window to establish residency elsewhere and shield their capital from a potential wealth tax if it's adopted this fall.

Several high-profile billionaires, including Google co-founders Larry Page and Sergey Brin and Palantir co-founder Peter Thiel, have been preemptively shifting some of their assets from California to Florida, where the tax structure is much more favorable.

Smith says that while the proposed tax, which Newsom has vowed to help defeat, is designed to apply only to Californians and would not directly affect foreign property buyers, it could alter the domestic side of the luxury buyer pool at the highest levels.

"For the ultraluxury market, this matters because California-based billionaires and high net worth individuals have historically been a significant source of domestic luxury demand," says the economist. "If ultrawealthy residents leave or redirect capital to states like Florida, Texas, or Wyoming, the composition of who is buying ultraluxury in L.A. could tilt further toward international and out-of-state buyers, or the overall volume of activity could soften."

So far, L.A. brokers are not overly concerned about the potential impact of the wealth tax on top-tier sales, pointing to the limited number of people who would be affected if it does take effect.

"If that tax passes, and that’s still a big if, I could see it opening up some property to more investors who can afford a nice Southern California mansion to use part time but not live here enough of the year to establish residency," says Currie.

Plaxen likewise does not expect to see a large-scale exodus of capital from L.A. and California.

"Most people understand that it's kind of a status symbol not to leave," says Plaxen. "You can't replicate the ecosystem here, you can't replicate the weather, you can't replicate the location. There's no place like Los Angeles."