SEATTLE NEWS ARCHIVES & FEATURES
Billionaire overpays by double for nation’s costliest home
Jul 10, 2012, 9:17 AM | Updated: Mar 4, 2016, 5:55 am
Russian tech billionaire Yuri Milner paid $100 million for a Silicon Valley mansion last year, breaking sales records. But now the Santa Clara County assessor says that he overpaid-by about half the true cost of the mansion that he has no immediate plans to occupy.
The French chateau-style estate, named the nation’s most expensive home last year by The Wall Street Journal, boasts 14 bathrooms, a ballroom, library, a home theatre, gym, indoor pool, sauna, private car washes in the garage, a 4,600-square-foot guest house, among other features.
The Santa Clara County assessor says the estate is really worth about $50.27 million. About 11 other luxury mansions were used as comparables and the home’s value was assessed by the county assessor’s office as well as three appraisers.
“For whatever reason, and we don’t know, Mr. Milner purchased the property at more than its fair market value,” Larry Stone, Santa Clara County assessor, told the Mercury News. “It doesn’t happen very often and we knew at the time that it was unusual … since the highest assessed residential property in Silicon Valley prior to that time was $28.5 million.”
However, the lower assessment of the 17-acre, 25,000-square-foot estate means that Milner, a venture capitalist, will get a “big property tax break,” according to the Mercury News. He will pay $600,000 a year in taxes. If the property was assessed at the value Milner paid for it, he would have had to pay about $1.2 million a year.
Prior to Milner’s purchase, the home’s assessed value had been $25.7 million and the tax bill was $304,000 per year. The taxes and assessed value nearly doubled when Milner purchased it, according to Santa Clara County assessor records.
The article notes that fair market value and sales price is not the same thing, and it’s not rare in the luxury home market for homes to sell for far more than their market value. Still, housing experts note that a $50 million discrepancy is surprising in the Milner purchase.
“Our job is to figure out, if it was listed on the open market-which this was not-what would other buyers have been willing to pay for it?” said David Ginsborg, a deputy for the Santa Clara County assessor. “Our conclusion was there was no way anyone would have paid $100 million.”
