Don Hankey, an 82-year-old longtime Los Angeles billionaire, bought a Summit Club penthouse on Jan. 8 for $21 million and says California’s proposed one-time 5% billionaire wealth tax prompted his move to Nevada. The 5,000-square-foot condo atop a country club includes a private lap pool and was purchased fully furnished so Hankey could relocate immediately. The ballot measure would apply to anyone who was a California resident on Jan. 1, 2026 and aims to raise about $100 billion for health care and education; backers must first collect roughly 900,000 signatures to qualify it for the ballot. Hankey, who is estimated by Forbes to be worth about $8.2 billion, says he will spend roughly two-thirds of his time outside California while keeping his companies headquartered in Los Angeles for now.
Key Takeaways
- On Jan. 8, 2026 an anonymous buyer paid a record $21 million for a Summit Club condo; Forbes identifies the purchaser as Don Hankey.
- The penthouse is about 5,000 square feet, features five bedrooms, a private lap pool and golf-club views; it is the highest condo price recorded in the development.
- The proposed California measure would impose a one-time 5% tax on net assets of billionaires who were residents on Jan. 1, 2026, targeting roughly $100 billion in revenue.
- Most affected billionaires would owe at least $100 million; Forbes analysis shows one individual could owe over $13 billion.
- Hankey is estimated to be worth $8.2 billion and would face an approximate $400 million levy if deemed a California resident as of the cutoff date.
- Hankey Group holds about $30 billion in assets and Hankey plans to keep company headquarters in Los Angeles while shifting more of his time and likely investment toward Nevada.
- Other prominent tech and finance figures have signaled similar moves or spoken publicly about leaving California since the proposal emerged.
Background
California activists and labor groups have advanced a citizen initiative that would collect signatures to place a one-time wealth levy on the ballot. The measure is sponsored by a coalition including Service Employees International Union and United Healthcare Workers West and would only apply to individuals who were California residents on Jan. 1, 2026. Backers say the tax would fund health and education programs and reduce extreme wealth concentration.
Opponents, including Governor Gavin Newsom, argue the proposal will drive wealthy taxpayers and companies out of California, reducing long-term revenue and harming job creation. Proponents counter with academic research suggesting relocation risk is limited, and the initiative’s authors have pointed to studies finding few billionaires actually leave in response to such levies. The plan faces procedural hurdles: petition drives must collect roughly 900,000 valid signatures, the measure must win a public vote, and legal challenges are expected.
Main Event
Hankey began looking for Nevada property in December 2025 after reading about the proposed tax and completed the Summit Club purchase on Jan. 8, 2026. He bought the five-bedroom penthouse fully furnished, including artwork and silverware, which enabled an immediate move to his new Nevada residence. Hankey told Forbes he felt unwelcome by the prospect of the tax and cited the decision as part personal preference and part financial calculation.
Hankey built his business career in California since 1972, growing the Hankey Group into a diversified financial-services conglomerate. His Westlake Financial provides high-interest auto loans through some 50,000 dealerships across all 50 states and Hankey also owns companies in insurance, car rental services and dealer software. The group has been involved in large real-estate developments and notable financing deals, including backing a $175 million bond in 2024 linked to Donald Trump’s New York civil-fraud case, a judgment later overturned.
While Hankey said headquarters will remain in Los Angeles for the time being, he indicated a stronger inclination to invest in Nevada and to split his time between the two states. Other prominent figures named in public comments since the measure surfaced include tech founders and venture investors who have likewise cited residency or tax concerns as motivating moves or expanded time outside California.
Analysis & Implications
The immediate fiscal aim of the one-time tax is substantial: roughly $100 billion for state programs, a sum that could materially expand healthcare and education funding if collected. Policymakers face a classic trade-off between near-term revenue generation and potential long-term behavioral responses such as relocation, altered investment, or legal challenges. If a meaningful number of wealthy taxpayers shift residency or restructure assets prior to the Jan. 1, 2026 cutoff, actual receipts could fall short of projections.
Economic effects on California could vary by sector. High-net-worth individuals often support local real estate markets, philanthropy and venture activity; a loss of some wealthy residents could reduce those flows. At the same time, proponents argue the tax would not meaningfully deter broader economic activity and could fund programs that enhance human capital, offsetting some negative effects. The real-world outcome depends on enforcement of residency rules and the timing of asset transfers.
Legal and administrative obstacles are also central. The ballot pathway requires a validated signature count, a public vote and is likely to attract court challenges over constitutionality and equal protection, among other issues. Even if the levy survives procedural and legal scrutiny, collection will require robust valuation rules for complex assets, and disputes over residency status can be protracted and fact-intensive.
Comparison & Data
| Item | Figure |
|---|---|
| Summit Club penthouse purchase | $21,000,000 (Jan. 8, 2026) |
| Penthouse size | About 5,000 sq ft |
| Proposed tax rate | One-time 5% |
| Residency cutoff | Individuals resident on Jan. 1, 2026 |
| Projected revenue | ~$100 billion |
| Signatures needed to qualify | ~900,000 |
| Hankey net worth (Forbes estimate) | $8.2 billion |
| Estimated Hankey tax liability if resident | ~$400 million |
The table highlights the key numerical stakes: the purchase price and size of the condo, the 5% tax rate, the Jan. 1, 2026 residency test and the broad revenue target. Those figures frame why high-net-worth individuals are taking timing and residency seriously now, and why state administrators will face complex valuation and enforcement tasks should the measure advance.
Reactions & Quotes
Several stakeholders have reacted publicly, reflecting sharply different views on likely behavior and policy effects.
It is ridiculous, and I felt a little bit like I wasn’t wanted, so I moved to Nevada.
Don Hankey
Hankey described the purchase as both practical and symbolic: a fast relocation that he says reduces the risk of being subject to the proposed levy.
When the dust clears, it is consistently and robustly found in the academic literature that very few, if any, actually move.
David Gamage, University of Missouri School of Law
Gamage, one of the measure’s authors, has pointed to academic studies arguing that wealthy taxpayers are less mobile than critics assume, a contention that will be tested if the proposal advances.
Many wealthy individuals have left in the past; the migration pattern is real and observable.
Russell Savage
Other wealthy residents and business figures have offered sharply contrasting anecdotes about past departures, underscoring the political and empirical dispute over how many will actually relocate in response to new taxes.
Unconfirmed
- Precise residency status for tax purposes: it is not publicly verified whether Hankey completed all legal steps to change domicile before Jan. 1, 2026.
- Scale of future departures: claims that large numbers of billionaires will leave are debated; academic studies and anecdotes point in different directions.
- Net revenue outcome: the $100 billion projection depends on enforcement, valuations and the number of affected taxpayers actually subject to the tax.
Bottom Line
Don Hankey’s purchase is a high-profile example of how proposed tax policy can prompt wealthy individuals to reassess residency and investment choices. The proposed one-time 5% tax is designed to generate substantial revenue for public programs, but it raises difficult questions about enforcement, valuation and behavioral responses that could reduce collections.
The ultimate outcome will hinge on procedural hurdles, voter sentiment and litigation outcomes, as well as on empirical realities about mobility among the ultrawealthy. Policymakers and stakeholders should expect prolonged legal and administrative debates, and observers should watch early residency cases closely for signals about how broadly the measure could be applied in practice.