California’s “mansion tax” is the nickname for Measure ULA, a City of Los Angeles transfer tax that adds 4% to real property sales of $5,300,000 or more and 5.5% to sales of $10,600,000 or more. Despite the name, it is not a statewide tax, and it applies to commercial and industrial property as well as luxury homes. Los Angeles voters approved it in November 2022, and it has been in effect since April 1, 2023.
Rates and Thresholds
Measure ULA sits on top of the city’s existing base transfer tax of 0.45% (calculated at $2.25 per $500 of sale price). The ULA portion only applies once a sale crosses the lower threshold. For transactions closing after June 30, 2025, the thresholds are $5,300,000 and $10,600,000, revised upward each year from the original $5,000,000 and $10,000,000 using the Bureau of Labor Statistics Chained Consumer Price Index.1Los Angeles Office of Finance. Real Property Transfer Tax and Measure ULA FAQ
There are two tiers:
- Sales of $5,300,000 or more but less than $10,600,000 pay 4% ULA, for a combined 4.45% with the base tax.
- Sales of $10,600,000 or more pay 5.5% ULA, for a combined 5.95%.
The tax applies to the entire sale price, not just the amount over the threshold. A sale at $5,300,001 owes 4% on the full $5,300,001.1Los Angeles Office of Finance. Real Property Transfer Tax and Measure ULA FAQ
Two worked examples:
- A $6,000,000 sale: ULA at 4% is $240,000, plus $27,000 in base transfer tax. Total: $267,000.
- A $12,000,000 sale: ULA at 5.5% is $660,000, plus $54,000 in base tax. Total: $714,000.1Los Angeles Office of Finance. Real Property Transfer Tax and Measure ULA FAQ
The Cliff Effect at Each Threshold
Because the tax hits the full sale price, pricing a property near a threshold matters enormously. A sale at $5,299,999 owes zero ULA. One dollar higher and the bill is roughly $212,000.
The same cliff hits at $10,600,000. A sale at $10,599,999 triggers the 4% rate for about $424,000 in ULA. A sale at $10,600,000 jumps to 5.5% of the full price, or $583,000. That is a $159,000 swing on a single dollar of price.
If you’re listing anywhere in the bands just below either threshold, run the net-proceeds math before setting an asking price. Pushing slightly past the line can easily cost you more than the price bump brings in.
Who Pays and When
The seller is legally responsible for the ULA tax. Buyers and sellers can renegotiate who bears it in the purchase contract, but the default under the ordinance puts it on the seller, and that’s where it usually lands.
Payment is due when the deed is recorded with the Los Angeles County Registrar-Recorder/County Clerk, which collects the tax and remits the city’s share to the Los Angeles Office of Finance. Escrow handles the payment with certified funds. Depending on the transaction, the seller or their agent completes a ULA Tax Affidavit or a Declaration of Exemption as part of closing.1Los Angeles Office of Finance. Real Property Transfer Tax and Measure ULA FAQ
Exemptions
Exemptions are narrow. They belong to the buyer, not the seller, and must be applied for through the Los Angeles Housing Department’s applicant portal. Ordinary homeowners and commercial sellers do not qualify. If the sale clears the threshold and the buyer is not a qualifying nonprofit or government entity, the tax is owed.
The affordable housing exemption under Section 21.9.14 covers 501(c)(3) nonprofits with a track record in affordable housing development or management, community land trusts, limited equity housing cooperatives, and partnerships where one of those entities is the managing member. A land trust or cooperative without the required experience can still qualify by partnering with an experienced nonprofit or by recording a permanent affordability covenant at the time of purchase.2City of Los Angeles Housing Department. Eligibility Guidelines for the ULA Homelessness and Housing Solutions Tax Exemption
The general exemption under Section 21.9.15 covers 501(c)(3) organizations with less than $1 billion in assets that have held tax-exempt status for at least ten years before the transfer, government entities, and any entity exempt from the city’s taxing power under the U.S. or California Constitution.2City of Los Angeles Housing Department. Eligibility Guidelines for the ULA Homelessness and Housing Solutions Tax Exemption
Federal Tax Treatment
The IRS does not let sellers deduct transfer taxes as real estate taxes on a federal return. Sellers can treat them as selling expenses, which reduces taxable gain on the sale. A buyer who pays transfer taxes can add the amount to the property’s cost basis, lowering the taxable gain when they later sell.3Internal Revenue Service. Publication 523 – Selling Your Home
On a $12 million sale with $714,000 in combined transfer taxes, the selling-expense treatment doesn’t erase the hit, but it does reduce the federal capital gains bill. Treatment differs for a primary residence, an investment property, or a business asset, so coordinate with a tax advisor before closing.
Pending Changes
Two things could change the picture. The Howard Jarvis Taxpayers Association has been collecting signatures for a statewide measure that would sharply cap municipal transfer taxes across California. As of March 2026, the campaign reported more than 1.3 million signatures gathered, against roughly 900,000 valid signatures needed to qualify for the November 2026 ballot; the measure is in signature verification. If it qualifies and passes, it could effectively gut Measure ULA.
Separately, a Los Angeles City Council ad hoc committee began reviewing the tax in early 2026 and taking stakeholder input on possible changes. Some proposals would soften the cliff by taxing only the amount above each threshold rather than the full sale price. Nothing has been enacted.
Other California Cities With High Transfer Taxes
Measure ULA applies only inside the City of Los Angeles. Other California charter cities set their own rates on top of the state’s standard $1.10 per $1,000 documentary transfer tax, and several of them hit high-value sales hard.4Los Angeles County Registrar-Recorder/County Clerk. Documentary Transfer Taxes – General Info
- San Francisco uses a tiered tax reaching 5.5% on sales between $10 million and $25 million and 6% on sales of $25 million and above.
- Culver City charges 0.45% on sales under $1.5 million, scaling up to 4% on sales of $10 million or more.4Los Angeles County Registrar-Recorder/County Clerk. Documentary Transfer Taxes – General Info
- Santa Monica charges $3 per $1,000 on sales under $5 million, $6 per $1,000 on sales between $5 million and $8 million, and $56 per $1,000 (5.6%) on sales of $8 million and above.4Los Angeles County Registrar-Recorder/County Clerk. Documentary Transfer Taxes – General Info
Confirm the current local rate for the specific city your property sits in before you set a timeline. If the Howard Jarvis statewide measure qualifies and passes, these local rates could be restricted along with Measure ULA.