Residing in the middle of luxurious Beverly Hills, the Los Angeles Golf Club is considered one of the most secretive golf clubs in the entire world. The 320-acre property has a $250,000 initiation fee, and the club also hands out a rule book totaling over 1,000 pages to every member.
Overview
The extremely strict rules and sky-high initiation fees are not even the craziest parts about the Los Angeles Country Club. With 320 acres, the assessed land value of the club’s property is approximately $8 billion. Most would think that this would mean that the club pays hundreds of millions in property taxes alone, but this is not the case. The Los Angeles Country Club only pays approximately $220,000 annually in property taxes, and this article will break down how that is possible.
Not-For-Profit
The Los Angeles Country Club is owned by its members and is seen as a not-for-profit in the eyes of the state of California. The club and its members benefitted greatly in 1960 when California voters passed a law that ultimately lowered the value at which state officials are allowed to appraise not-for-profit golf courses.
Proposition 13
In 1978, California voters approved Proposition 13. Proposition 13 rolled back the assessed land value of the LA country club to its value three years prior in 1975. The same law essentially froze that 1975 value in time, meaning that even if the market value of the land tripled, the assessed value can only be raised by either 2% or the current rate of inflation, depending on which rate is lower at the time.
What This Means
With its land being valued at $8 billion, the Los Angeles Country Club would be paying around $80 million a year in taxes if it wasn’t for the two laws that were passed almost 50 years ago. These laws make the land’s property value assessed at only $22 million since that price was locked in during 1975. This is how one of the world’s most expensive private golf clubs only pays $220,000 in property taxes.
Wrap Up
The 123rd U.S. Open just took place at the Los Angeles Country Club, where many players on the tour had to look the course up on YouTube, as many of the pros have never had access to the club. When it comes to Proposition 13, the law was originally passed to help retired and older homeowners living on a fixed income, so they could be protected from the soaring market values of their properties. However, many county clubs in the area, especially the LA Country Club want to keep things exactly how they are.