The Measure ULA transfer tax adds a 4% or 5.5% real estate transfer tax to sales of property inside the City of Los Angeles that clear roughly $5.3 million, on top of the existing city and county transfer taxes. It took effect on April 1, 2023, after voters approved it in November 2022, and it applies to residential, commercial, and industrial property alike.
Current Rates and Thresholds
Two brackets apply, based on the total gross value of the property being transferred:
- 4% when the gross value is more than $5,300,000 but less than $10,600,000.
- 5.5% when the gross value is $10,600,000 or more.
Those figures took effect on July 1, 2025, replacing the original $5 million and $10 million thresholds. The numbers adjust every July 1 using the Bureau of Labor Statistics Chained Consumer Price Index, so a new set arrives each summer.1Los Angeles Office of Finance. Real Property Transfer Tax and Measure ULA FAQ
ULA sits on top of the Los Angeles city base transfer tax of 0.45% and the Los Angeles County documentary transfer tax of $1.10 per $1,000 of value.2Los Angeles County Registrar-Recorder/County Clerk. Documentary Transfer Taxes
How the Tax Is Calculated
The critical thing to understand about the math: the tax applies to the entire gross value of the property, not just the amount above the threshold. Gross value includes any liens or encumbrances remaining on the property at the time of sale.1Los Angeles Office of Finance. Real Property Transfer Tax and Measure ULA FAQ
That creates a steep cliff at each bracket boundary. A property that sells for $5,300,001 owes $212,000 in ULA tax (4% of the full sale price). Sell the same property for $5,299,999 and the ULA tax is zero. Two dollars of price difference costs the parties more than $200,000. The same cliff repeats at the $10.6 million line, where the rate jumps from 4% to 5.5% on the whole amount.
What a Sample Bill Looks Like
On a $7 million sale, the transfer tax picture works out like this:
- County transfer tax: $7,700 ($1.10 per $1,000)
- City base transfer tax: $31,500 (0.45%)
- Measure ULA tax: $280,000 (4%)
- Total transfer taxes: $319,200
On a $12 million sale, the ULA portion alone reaches $660,000 at the 5.5% rate.
Who Pays It, Buyer or Seller
Los Angeles treats the real property transfer tax as an excise tax on the privilege of selling real property.1Los Angeles Office of Finance. Real Property Transfer Tax and Measure ULA FAQ In practice, the allocation between buyer and seller gets negotiated in the purchase agreement. Escrow instructions should spell out who covers the city transfer tax, the county transfer tax, and the ULA tax specifically. If your contract is silent on ULA, don’t assume the standard transfer-tax split automatically picks it up. A six-figure surprise at closing is worth addressing early.
Exemptions
Not every large transaction triggers ULA. The ordinance carves out exemptions aimed mostly at keeping the tax from discouraging affordable-housing work.
Affordable Housing Organizations
Under LAMC Section 21.9.14, these transferees can claim an exemption if they have a track record in affordable housing development or management:
- 501(c)(3) nonprofits experienced in affordable housing development or property management
- Community land trusts organized as 501(c)(3) entities
- Limited equity housing cooperatives as defined under California Civil Code Section 817
- Partnerships (LPs or LLCs) where a qualifying nonprofit, community land trust, or limited equity housing cooperative is the general partner or managing member3City of Los Angeles Housing Department. Eligibility Guidelines for the United to House Los Angeles (ULA) Homelessness and Housing Solutions Tax Exemption
General Nonprofit and Government Exemptions
Under LAMC Section 21.9.15, a broader group can avoid the tax regardless of any affordable-housing role:
- 501(c)(3) entities that received their IRS determination letter at least ten years before the transaction and hold less than $1 billion in assets
- Government entities at the federal, state, or local level
- Entities that fall outside the city’s taxation power under the California or U.S. Constitutions
Transactions already exempt from the city’s base real property transfer tax under existing local, state, or federal law are also exempt from ULA.1Los Angeles Office of Finance. Real Property Transfer Tax and Measure ULA FAQ
Federal Tax Consequences
A transfer tax this large matters at filing time. Under federal law, taxes paid in connection with buying or selling property are not deductible as itemized taxes. Instead, they fold into the transaction itself: for a buyer, the transfer tax increases cost basis in the property; for a seller, it reduces the amount realized on the sale.4Office of the Law Revision Counsel. 26 USC 164 – Taxes
For a seller, the lower amount realized means a smaller capital gain. A seller paying $280,000 in ULA tax on a $7 million sale would subtract that amount from the gain calculation. For a buyer, the higher basis means a larger offset against gain on a future sale.
If you are rolling the proceeds into a 1031 exchange, transfer taxes qualify as transactional costs that can be paid from exchange funds without triggering constructive receipt, under Treasury Regulation ยง1.1031(k)-1(g)(7). Paying the ULA tax from exchange proceeds will not disqualify the exchange or create a taxable boot event.
How the Thresholds Are Reshaping the Market
The cliff effect changes how deals get done. Research from UCLA’s Lewis Center for Regional Policy Studies found that since Measure ULA took effect, the odds of a Los Angeles property selling above its applicable tax threshold have dropped by as much as 50%. The effect was especially pronounced for non-single-family transactions, where sales volume above the threshold fell by 30% to 50%. Sellers and buyers are structuring deals to land just under the $5.3 million and $10.6 million lines, sometimes pricing properties lower than they might otherwise command, using seller financing, or splitting transactions to keep each piece below the threshold.
The arithmetic makes it rational. On a $5.4 million sale, accepting $5.29 million instead saves the parties $212,000 in ULA tax. Those threshold prices have become sticky points that distort comparable sales data throughout the upper end of the LA market.
Legal Status
Measure ULA has survived its main legal challenge so far. The Howard Jarvis Taxpayers Association argued the tax violated both the California Constitution and the Los Angeles City Charter. A Los Angeles County Superior Court judge dismissed the challenge, and in 2025 a three-judge panel of the California Court of Appeal for the Second District affirmed. The appellate court concluded that Measure ULA’s passage by a majority of city voters was a valid exercise of the people’s initiative power, and that while Proposition 13 restricts a local government’s ability to impose a special transaction tax, it does not limit voters from doing so through a ballot initiative. The Howard Jarvis Taxpayers Association has indicated it may seek review from the California Supreme Court, so the legal picture could still shift.