What is ULA?

Beginning on April 1, 2023, all home sales over $5 million in LA county will be hit with the ULA Measure “Mansion Tax”.

This new tax applies to closings above $5 million, adding an additional 4% tax on the sale. Properties sold at $10 million or more will be taxed 5.5% on the sale. Breaking it down, if a home sells for $5 million on March 30 the transfer tax will be around $23,000. On April 1 that number jumps to $200,000. If you sell a $10 million house on March 30, that tax is about $45,000. That number will rise to $550,000! These are obviously huge increases that will impact the entire real estate market in Los Angeles.

This new tax applies unilaterally for both residential and commercial real estate. The one-time tax will be deducted through escrow, regardless of whether the seller is taking a loss on the property.

So if you’re looking to buy or sell in the “luxury market”, now is the time. Aim to close before April 1 or risk facing this new tax. Have more questions? Please reach out!

Editor’s note:

This article was originally published in 2023. Measure ULA thresholds and guidance may change over time, so buyers and sellers should confirm current rules with the City of Los Angeles or a qualified real estate, legal, or tax professional.