What is ULA?

Beginning on April 1, 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!