Usually in Los Angeles and Beverly Hills, but not exclusively so: refers to a large, gaudy, expensive custom-built house that ignores any considerations of taste, architectural proportions, or the surrounding environment. Far worse than a McMansion. The term "Persian Palace" was coined in the last decades of the 20th century after well-heeled Iranians (who then began calling themselves Persians again) began emigrating to Southern California and buying up real estate. Typically, the owners (who today do not absolutely have to be Persian, by any means) will tear down a perfectly decent, existing house, paying no heed to its historical or architectural value, in order to replace it with the Persian Palace. This ugly new monstronsity will be far too large for the lot, gobbling up nearly all of the lawn and adjacent spaces. The Palace will also boast phony "classical" features, such as pseudo-Corinthian pillars thoughtlessly tacked on, with the whole mess painted in extremely garish colors, and a fleet of expensive, flashy, late-model foreign cars (with spinners and tinted windows) jamming the driveways.
"Did you see Jeremy's new house on the West Side? He tore down the little 1930s Spanish bungalow and put up a Persian Palace. Damn thing is completely pink. There's, like, no front yard at all, either."