Los Angeles' 'mansion tax' explained

STORY: Why are Los Angeles' super rich rushing to sell their properties?

Starting on April 1, a new law will impose what's been dubbed an extra "mansion tax" on sales of more than $5 million.

And sellers are desperate to unload before th deadline, according to some of the city's top real estate agents.

Here's what you need to know.

The new law imposes a 4% 'mansion tax' on property sales over $5 million,

and a 5.5% levy on properties worth over $10 million.

The revenue is designed to fund affordable housing projects

to combat homelessness in what is one of the most expensive housing markets in the United States.

The new fee doesn't apply to other cities in Los Angeles County.

Some real estate agents worry the tax will be bad for business.

Here's Jason Oppenheim, founder and president of the Oppenheim Group.

"This tax is coming in when you're seeing a very significant decrease in sales volume anyway. The markets are are having a very difficult time, real estate is having a very difficult time because of inflation and because of high interest rates. It's just the worst possible timing. It's really, really devastating for the community."

The looming tax seems to have triggered a surge among the L.A. elite.

Billy Rose, co-founder of a real estate company called The Agency, says some sellers have been offering cars and million dollar commissions as an incentive to sell properties as soon as possible.

"There definitely has been a somewhat discernible flurry of last-minute activity. I think the first couple, 60 days did not seem like it was going to be anything of statistical significance. But many properties have gone into escrow in the last couple of weeks and many closings are occurring in the last couple of weeks."

"So unfortunately, it was very ill conceived and it's going to cause a lot more negative than it does positive. And it's also pushing a lot of wealthy people out of Los Angeles. You've got, because of homelessness, because of crime, but more probably more saliently because of higher taxes, you're seeing wealthy people leave Los Angeles and California in droves, like I've never seen before."