Understanding the Impact of Measure ULA Mansion Tax on Luxury Real Estate in LA

Mansion Tax Los Angeles

With the implementation of Measure ULA on April 1, 2023, the objective of the United to House LA, also known as the mansion tax, is to eradicate homelessness. Who pays for it? The home seller.

This ULA mansion tax law imposes a 4% tax on luxury real estate transactions over $5 million, increasing to a 5.5% tax on sales over $10 million.

To support affordable housing initiatives and offer support to residents in danger of homelessness, Measure ULA established the ULA Tax.

This tax affects all real estate transactions above $5M, including vacant land, commercial, residential, and industrial transactions. It covers all real estate transactions.

What Cities Are Exempting from Mansion Tax?

The good news is that it only pertains to real estate transactions in Los Angeles! As a result, 84 other localities in LA County, including Beverly Hills and Pasadena, are immune from this tax. Fortunately, places like Calabasas, Sherman Oaks, Studio City, Malibu, and Hidden Hills won't be impacted by the Measure ULA and Los Angeles Mansion tax. 

Los Angeles recently passed Measure ULA

It applies to the City of Los Angeles, not the county; some cities are exempt from The Mansion tax.

Santa Monica Passed their new measure called Measure GS. Santa Monica Measure GS has 3 different tiers of city tax transfer fees. 

1-The tax rate for real estate valued under $5 million is 0.3% of the purchase price.

2-The tax rate for real estate valued between $5 million and $8 million is 0.6% of the purchase price.

3-The tax rate for real estate sold for $8 million or more is 5.6% of the transaction price. 

Measure GS covers homelessness prevention, affordable housing, and schools, which Santa Monica voters approved.

In conclusion, Measure ULA, also known as the mansion tax, was implemented on April 1, 2023, with the aim of eradicating homelessness in Los Angeles. The ULA tax imposes a 4% tax on luxury real estate transactions over $5 million, increasing to 5.5% on sales over $10 million. This tax will support affordable housing initiatives and assist residents at risk of homelessness. However, it's important to note that this tax only applies to real estate transactions in the City of Los Angeles, and some cities are exempt, including Beverly Hills and Pasadena. Additionally, Santa Monica has passed its measure, Measure GS, which imposes transfer taxes on real estate transactions based on their value; anything over $8 million or more is 5.6% of the transaction fee paid to the city. This tax will support homelessness prevention, affordable housing, and schools. As with any real estate transaction,

You must consult with your accountant to ensure you understand all fees and taxes before listing your home so you are confident.