- Bill Gates has built up an extensive and valuable real estate portfolio.
- His many homes come with a multimillion-dollar tax bill each year.
- Here’s how much Gates paid in property taxes last year.
As the old saying goes, nothing is certain except death and taxes.
And while the very rich have been criticized for not paying their fair share, there is one area where it’s quite difficult to evade the taxman: property.
Every year, billionaires have to take out their checkbooks and send thousands to their local governments. Although the amount they pay is usually pennies compared to their overall net worth, some billionaires who have amassed vast real estate portfolios pay sums in taxes that would make a mere mortal’s jaws drop.
Bill Gates is one of them. Last year, homes owned by Gates and his ex-wife, Melinda French Gates, racked up a $2.7 million property tax bill last year. That’s more than 700 times more than the average American pays in property taxes each year.
The former richest man in the world, Gates has amassed 275,000 acres of land, making him the 42nd largest landowner in the country, according to the Land Report. Although most of it is agricultural land and tied to investments, 245 acres are for personal use.
He and French Gates spent more than $150 million over three decades to buy out their current real estate portfolio. Following their divorce in 2021, a number of properties were transferred from one trust to another. It’s almost impossible to discern who owns what, because all of their trusts are tied to the same Seattle bank.
Gates’ highest property tax bill is in Washington state, where he owns a 10.5-acre property in the upscale Seattle suburb of Medina on Lake Washington. He spent $34 million to purchase the 12 parcels in and around his mansion, known as Xanadu 2.0, and together they have an estimated value of $183.5 million. Last year, property taxes on the properties totaled $1.3 million. Taxes on the largest of the parcels — 5.15 acres on the water — will top $1 million this year.
Gates owns five properties in California, where property values are known to be high. Taxes are highest on the Del Mar beach house he purchased in 2020. The house, which cost $43 million and set a record at the time, came with a tax bill of about $480,000 last year.
In Florida, where Gates owns an equestrian resort in Wellington, he paid $280,000 in taxes last year, and in Montana, where he owns a home in the exclusive Yellowstone Club, he paid $107,000.
Although high by most standards, Gates’ property tax bill represents less than 0.01% of his $148 billion net worth — and a fraction of his total tax bill.
Even though Gates pays a higher effective tax rate on his wealth growth than other billionaires, he has a lower effective tax rate on his earnings than most other billionaires and high-income Americans. In 2022, ProPublica said his average annual income from 2013 to 2018 was $2.85 billion and his annual federal income tax rate was 18.4%, meaning he would have paid about $525 million in federal income taxes each year, according to BI calculations.
But he’s not the type to complain. Gates said the ultra-rich should pay more taxes.
“As for the very rich, I think they should pay a lot more taxes and they should distribute their wealth over time,” he said during an “Ask Me Anything” message. ” on Reddit last year.
businessinsider
