In late August, rumors swirled claiming that The Weeknd was in talks to raise $1 billion in money utilizing his music catalog royalties as collateral. You know the way artists like Bob Dylan and Bruce Springsteen have bought their catalogs for a whole bunch of thousands and thousands? In these circumstances, they bought the whole lot — the rights, the royalties, the management. As soon as the examine cleared, they now not owned their songs. The Weeknd’s plan is completely different. He is reportedly on the lookout for somebody who will give him $1 billion at this time with out requiring him to promote a single be aware.
David Bowie did one thing similar back in 1997, although on a a lot smaller scale. He used his catalog to again a $55 million bond situation that grew to become often called the “Bowie Bonds.”
There’s been no affirmation that The Weeknd has secured his billion-dollar deal but, however maybe in anticipation of a future windfall, he simply purchased a spectacular new mansion in tax-friendly Florida.
$130 Million Causes To Depart California
The Canadian-born singer, whose actual title is Abel Tesfaye, has been residing within the tax-unfriendly state of California since 2017. That 12 months, he paid $18 million for an property within the Los Angeles suburb of Hidden Hills, which he later bought to Madonna in 2021 for $20 million. In 2019, he doubled down on his California actual property portfolio with a $21 million penthouse close to Beverly Hills, solely to promote that unit at a $2 million loss in 2023.
Then got here his greatest actual property transfer but. In August 2021, The Weeknd paid an astonishing $70 million for an property in Bel-Air. The 33,000-square-foot property, bought in an off-market deal, sits on 1.6 acres overlooking the Bel-Air Nation Membership. The property consists of an indoor pool, health club, sports activities court docket, movie show, music studio, and a resort-style outside pool.
Contemplating California’s nation-leading earnings tax fee of 13%, it could be financially prudent for The Weeknd to relocate to a state like Florida, which has no earnings tax. If he have been to boost $1 billion from his catalog whereas residing in California, he’d owe roughly $130 million to the state. In Florida, his tax invoice can be precisely zero.
Nonetheless, it isn’t so simple as shopping for a home, spending a couple of months there, and declaring your self a Floridian. California’s tax authorities — formally often called the Franchise Tax Board, or FTB — are notoriously aggressive about pursuing former residents who out of the blue declare to have moved out of state. If The Weeknd occurs to be studying this, here is some pleasant recommendation: transfer to Florida, truly stay there for effectively over a 12 months, after which increase that $1 billion. The FTB has a protracted historical past of chasing down rich Californians who attempt to escape its grasp. The FTB might nonetheless declare a 13% reduce, arguing that the catalog was constructed whereas he was a California resident. Or, on the very least, it might request a partial reduce by contemplating The Weeknd a partial California resident. Both manner, a combat with the FTB could be expensive and annoying. Higher to do it proper from scratch.
***Replace/Correction***
After we printed this text, a reader who didn’t provide his or her title despatched us some suggestions, which, if correct, adjustments a lot of what we now have within the above part. I can not 100% affirm or deny this suggestions, but it surely does sound just like the particular person is aware of what she or he is speaking about, so I will simply embrace it right here on your data:
“Whether or not he points precise bonds or simply borrows the $1B, there wouldn’t be any taxes owed on the cash he raised in opposition to his catalog. It could simply be enterprise as normal, paying taxes on the earnings generated to fulfill the compensation phrases of the bonds. Actually, the curiosity incurred to service the bonds or debt would doubtless be tax-deductible. So transferring to FL can be sensible, as it could doubtless take him 10-15 years to service the bonds, however he would simply have the ability to set up FL as his tax house with out worry of penalty to CA, since you do not pay taxes on borrowed cash, together with the issuance of bonds.”
$55 Million Florida Property
That brings us to The Weeknd’s new Florida mansion. Property data and a number of stories point out that he just lately bought a spectacular waterfront property in Coral Gables for roughly $55 million. The precise buy worth shouldn’t be but recognized. Its most up-to-date itemizing worth was $54.9 million.
The 14,000-square-foot modern house was beforehand owned by investor Steven Lempera, who had purchased it in 2020 at a web based public sale for $27.8 million — a steep low cost from its unique $68 million asking worth. Lempera later listed it for almost $50 million, and The Weeknd seems to have paid near that quantity within the deal.
The home sits on a dramatic V-shaped lot with water on each side and features a non-public dock giant sufficient to accommodate a 200-foot mega-yacht. The nine-bedroom property is smooth and trendy, with hovering ceilings, a grand double staircase, huge open entertaining areas, a health club, an workplace, and a resort-style pool adorned with intricate coral-patterned tile mosaics that shimmer by means of the water. The property was bought totally furnished, with interiors performed largely in crisp white tones accented by vibrant shades of blue.
Initially designed for entertaining on an enormous scale, the house additionally consists of a number of eating areas, expansive outside terraces, and floor-to-ceiling glass partitions that overlook Biscayne Bay. Actual property brokers concerned within the prior sale famous that it is among the many largest and most visually distinctive properties in Coral Gables — an space lengthy favored by ultra-wealthy patrons for its proximity to Miami whereas retaining a quiet, residential environment. Here’s a video tour from a 12 months in the past:
