The Los Angeles mansion tax, officially Measure ULA, charges a 4% transfer tax on real property sales in the City of Los Angeles above $5,300,000 and 5.5% on sales of $10,600,000 or more. Voters approved it in November 2022 and it has applied to closings since April 1, 2023. The tax is calculated on the full sale price starting at dollar one, not just the amount above the threshold, and the seller is legally responsible for paying it at recording.
How the Rate Is Calculated
Measure ULA has two tiers tied to the total consideration paid, including any liens or encumbrances remaining at the time of sale. For transactions closing after June 30, 2025, a sale above $5,300,000 but below $10,600,000 pays 4%, and a sale of $10,600,000 or more pays 5.5%.
The structure that trips up sellers is that the rate applies to the entire price. A $6,000,000 sale owes 4% on all $6,000,000, which is $240,000. Price the same property at $5,299,999 and the ULA tax is zero. That cliff is why listings cluster just under the threshold.
Thresholds started at $5,000,000 and $10,000,000 and adjust each July 1 based on the Bureau of Labor Statistics Chained Consumer Price Index.1Los Angeles Office of Finance. Real Property Transfer Tax and Measure ULA FAQ Confirm the current figures before pricing a property or entering escrow.
What You Actually Owe at Closing
Measure ULA does not replace the existing documentary transfer taxes in Los Angeles. It sits on top of them. The county charges $0.55 per $500 of value transferred, and the City of Los Angeles charges $2.25 per $500. Combined, the base transfer taxes come to roughly $5.60 per $1,000 of sale price.2Los Angeles County Registrar-Recorder/County Clerk. Documentary Transfer Tax General Information
On that $6,000,000 sale, the base taxes add about $33,600 to the $240,000 ULA tax, pushing the total transfer tax burden past $273,000. One quirk worth knowing: the base city rate is calculated on value transferred minus any remaining liens, while the ULA tax is calculated on the gross consideration including liens.1Los Angeles Office of Finance. Real Property Transfer Tax and Measure ULA FAQ
Who Pays the Tax
The seller is legally responsible for reporting and paying Measure ULA. In practice, the obligation often becomes a negotiating point. A seller in a slow market may absorb the full amount to close; in a stronger market, a buyer may agree to cover part of it through a price adjustment or credit. Whatever the parties agree to privately, the city looks to the seller.
The tax reaches all types of real property inside the city limits, including single-family homes, apartment buildings, and commercial property. Any transfer of a real property interest can trigger it, not only a traditional sale. Transfers from legal settlements and certain long-term lease assignments may also qualify.
Transfers That Are Exempt
Not every sale above the threshold owes the tax. LAMC Section 21.9.14 exempts transfers to qualified affordable housing organizations. Qualifying buyers include 501(c)(3) nonprofits with a demonstrated history of affordable housing development or management, community land trusts as defined by the Los Angeles Administrative Code, limited-equity housing cooperatives under California Civil Code Section 817, and partnerships or LLCs whose general partners or managing members are limited to those three types of entity.3American Legal Publishing. Los Angeles Municipal Code SEC 21.9.14 – Exemption – Qualified Affordable Housing Organization
The Los Angeles Housing Department decides whether an organization has the required experience. A community land trust or limited-equity cooperative without its own track record can still qualify by partnering with an experienced nonprofit or by recording an affordability covenant at acquisition.
Government agencies and public entities are also exempt when they acquire or transfer property in the city.1Los Angeles Office of Finance. Real Property Transfer Tax and Measure ULA FAQ Claiming an exemption requires documentation of the entity’s status and the planned use of the property. Misrepresenting status to avoid the tax exposes the parties to back-tax liability and penalties.
One boundary worth being clear about: this is a transfer tax on sales within the City of Los Angeles. It does not apply to property held without a sale, and it does not apply to transfers in surrounding cities even if they share a Los Angeles mailing address.
Penalties for Late Payment
The city adds a penalty of 5% of the principal tax due on the first day of each of the first four months of delinquency.4Los Angeles Office of Finance. Penalties Rates On a $240,000 ULA bill, four months of delinquency adds $48,000 in penalties alone, before interest. Because the Registrar-Recorder will not record the deed without full payment, delinquency usually surfaces when parties tried to structure around the tax or understated the real consideration.
The Legal Challenge and Protective Refund Claims
The Howard Jarvis Taxpayers Association challenged Measure ULA, arguing it violated Proposition 13’s limits on special taxes and exceeded the city’s charter authority. In 2025, the California Court of Appeal rejected both arguments and held that voter-approved initiatives are not bound by the restrictions that apply when a local government imposes a special tax on its own.5Justia Law. Howard Jarvis Taxpayers Assn. v. City of LA – 2025 The plaintiffs have signaled they may seek California Supreme Court review.
Because the litigation is not fully closed, a seller who pays the tax can file a protective refund claim to preserve the right to recover if the measure is later struck down. The deadline is one year from the date the tax is paid. The process requires both a Claim for Damages with the City Clerk and a Claim for Refund Application with the Office of Finance. The city will likely deny the claim, which starts a six-month clock to file suit. An attorney can help manage that timing while the broader case plays out.
What It’s Done to the Market
Measure ULA has visibly changed how high-value Los Angeles property trades. Research from UCLA’s Lewis Center found that properties above the threshold are roughly 50% less likely to sell than before the measure, with the sharpest declines in multi-family and commercial transactions. Sellers routinely price just under the $5.3 million line, and buyers in the affected range factor the tax into their offers, often expecting an equivalent reduction. The seller writes the check, but the economic cost tends to get shared.