OK, this story is too absurd to be true.
It’s no secret that pop diva Madonna and her seventh husband, film director Guy Ritchie, have been close to each other since meeting back in the early 1990s. While the relationship has gone through some rocky patches in the intervening years, it has always been intensely private and hasn’t spilled into public.
It was just a few weeks ago, in fact, that Madonna told The Guardian that it was “the height of romanticism” to think of falling in love.
But, according to the Australian news site Domain.com.au, Guy has been putting his very expensive home in London on the market. And, as a show of support, Madonna reportedly called up a real estate broker to see if the asking price was enough to tempt him to stay at the $44 million manse.
“Madonna loves real estate and the current market,” a source told Domain.com.au. “She has been living at her mansion in Portugal since November so she and Guy are on good terms and I’m sure Guy had heard that she was really interested in moving in so she popped up to show him the views and encouraged him to lease, which ultimately worked out.”
Real estate consultant Harry Johnstone confirmed that he had received a call from “a connected business,” but said he wasn’t sure if they were trying to sell the house, or if “it’s a bizarre way to ask for her to move in.”
On the upside, the men are getting a great deal in the end. According to Mark Quayle, a property journalist and investigator for PropertyGuys.com, an Australian website that focuses on properties and people involved in the industry, the UK government offers residents a generous tax deal when they buy an overseas property — including buying a house in London — as an investment.
According to Quayle, this allows people to take advantage of the U.K.’s property tax regime and the wealth they’ll make by buying an overseas property. This is how property investor Charles Holmes bought an apartment in Windsor Place, a 16-storey apartment building in West Hollywood, that is now one of the most expensive in the United States.
The benefit of this is, while the buyer generally incurs a 35 percent tax (or capital gains tax), the 35 percent is written off against what he actually pays on the property. His annual capital gains tax doesn’t exceed 35 percent of his total income. So, under this system, unless he has an income of $275,000 to $285,000 a year — excluding capital gains — he could be paying zero tax, instead of 35 percent, on this high-end rental property.
That means that a celebrity — and a guy who has had a very public marriage and divorce, doesn’t enjoy his family’s best interests, and had to sell his home — could buy a property in a city like Beverly Hills for as little as $2 million, and pay no capital gains tax when he sells it.
“Buyers will typically have to spend around six months renting a property like this before they move in. In exchange for renting for six months, the purchaser will usually gain the buyer’s rights to live there for 12 months after they purchase,” Quayle told Domain.com.au.
“The upside is that you don’t have to pay capital gains tax on the tax-free rental income,” he added. “The downside is that you don’t own the home, the property has a mortgage and the benefit of the capital gains tax holiday is just when you buy it.”
So, while “engaging with a lawyer for a quick buy-sign-sell can be quite complicated,” as Quayle puts it, there is an obvious upside to it and, apparently, Madonna takes notice.