Betting Against Housing Yields A 56,000 Square Foot House

“John Paulson bought Hala Ranch, a 90-acre and a separate site in the town for $49 million. The ranch, built by the prince about 20 years ago”
It was obviously overpriced. Seems like the Saudi Prince made out on this deal.

Why is this guy paying 15% on his income while the rest of us pay 30%+?

Lol, don’t you think people who run businesses deserve to pay less tax? Don’t they take the risk and provide job opportunities for others?
On a related note, do you think it’s fair for one person to pay 75k in income tax (on 250k in earnings) but another to pay 750M (on 4B in income)? How is that fair? Why should one pay 10000X more tax than another?

Longtail, you have a LOT of homework to do.
read up!

Even if you accept just for the sake of argument the Objectivist dogma that “people who run businesses deserve to pay less tax” because “they take the risk and provide job opportunities for others”, it’s still a logical leap to say that someone running a hedge fund “provides job opportunities for others” commensurate with the difference in taxes paid relative to other types of businesspeople.
Someone like Elon Musk is not engaged in the same kind of business enterprise as John Paulson.

“On a related note, do you think it’s fair for one person to pay 75k in income tax (on 250k in earnings) but another to pay 750M (on 4B in income)? How is that fair?”
Yep. The guy making 4B receives a WAY bigger benefit from the services the US Guv provides, from protecting the high seas so commerce is smooth, to regulating the financial markets so they are efficient, to building highways and airports so goods can travel, to protecting our borders and policing our streets so that citizens are safe and productive and spend/save money rather than having it stolen by thieves, to educating the populace so that they are productive workers and consumers.
Let’s consider the alternative: determine the lowest $ of taxes the poorest citizen can pay (that would be ZERO) and assess the same to everyone in the name of “fairness.” Yay, we all pay zero taxes, and that will create a sound and safe government and society!

It was obviously overpriced. Seems like the Saudi Prince made out on this deal.

Uh…I don’t know about “obviously overpriced”. If it were, wouldn’t you expect someone who is “obviously” financially savvy to drive a hard bargain when negotiating the sales price?
Why do I say that? Because I read this in Vanity Fair a while back (on dead trees); Hamptons Overdrive: While much of America worries about foreclosure, John Paulson, who made $3.7 billion shorting subprime mortgages, has plunked down $41.3 million for a Southampton estate.

Old Trees is a gated estate of 10.4 acres–a private park, really–with a 15,000-square-foot 1911 Georgian mansion, guesthouse, barn, pool, and tennis court overlooking Lake Agawam, in the heart of Southampton Village. Last fall, after it had languished some months on the market at $48 million, Rodney Propp, a 43-year-old Manhattan-based real-estate investor, offered $39.2 million and, on November 20, 2007, signed a contract of sale.

Propp had done well–very well–in part by buying up residential buildings in Harlem during the last decade and presiding over the area’s gentrification. But as the stock market’s autumn swoon deepened, and the subprime-mortgage crisis metastasized, Propp’s plans for Old Trees seemed to founder. He had gone into the deal thinking he’d keep the main house for his family but possibly sell off two lots of the compound–one with the guesthouse, tennis court, and pool; the other with the barn–together totaling 2.8 acres. “He wanted $15 million for the two lots,” says a developer who was approached to buy one. “But everyone felt he’d take $12 million.” Even then, Propp would end up with a princely Southampton domain of seven-plus acres for under $30 million. In the Southampton estate section, that’s not bad.

But no one stepped up to buy the shavings from Old Trees–at any price. By mid-March, when Bear Stearns imploded, not one bid had yet come in, and the world looked very different than it had in November.

Propp could not be reached for comment, but family considerations, a source close to him says, came into play: Propp has three pre-school-age children, and a wife who was finishing law school, and the prospect of taking on Old Trees’ staff of four, not to mention furnishing its 22 bedrooms, suddenly seemed daunting. Whatever the incentive, Propp wanted out. To his relief, the greatest Wall Street winner of 2007 wanted in.

John “J.P.” Paulson, 52, had just made $3.7 billion shorting the subprime-mortgage market: betting tens of millions of dollars it would go bust. His was thought to be the highest annual compensation on Wall Street—ever. Happily for Propp, he took a liking to Old Trees.

Thus, on the last day of March 2008, Rodney Propp became the owner of Old Trees for $39.2 million, only to sell it four days later to Paulson for almost the same sum plus transfer tax—in all, a reported $41.3 million. Paulson, a shy, smooth-faced family man and father of two young daughters, was taking possession of his house as millions of Americans were losing theirs.

Emphasis added. I guess you can take this story two ways.
Either Paulson is one of those price-insensitive “wales” you overhear real estate agents talking about at the coffee shop that falls in love with a property and will pay asking to get it, regardless of the overall circumstances, where in this case “asking” is what Propp paid in 2007 plus transfer tax.
Or Paulson was a shrewd negotiator that took into account the fact that Propp was in no position to play the part of the patient investor and wait until the market recovered while maintaining a mansion with a household staff (read: servants like in Downton Abbey just fewer of them) and thus negotiated a favorable price, considering that Propp wanted $12M-15M just for the two accessory lots, to take the entire property off Propp’s hands, at a 14% discount off the pre-2007 sale asking.
I don’t think the more likely scenario is “obvious”.

“All of the is tounge in cheek as there are only a handful of buyers in the world for this “home”.”
Precisely 1% of the buying population to be exact.

Milkshake: I agree with you that there is no way the top 1% of the U.S. income and/or wealth distribution could bid on this place. But, you seem to have missed the part about “…handful of buyers in the world…”

According to Wiki there’s 93,100 people in the world with more than $30mm.
So .0014% of the world population has more than $30mm. And you need a lot more than that to buy this place.