If you’re selling a home inside the City of Los Angeles above a certain price, Measure ULA is going to show up on your closing statement, and it’s a bigger number than most sellers expect the first time they see it.
What Measure ULA Actually Is
Measure ULA is a City of Los Angeles real property transfer tax that’s been in effect since April 1, 2023. It sits on top of the standard county and city transfer tax that applies to every sale, so it’s an additional cost, not a replacement for anything. The tax was designed to fund homelessness and affordable housing programs, and it applies specifically to higher-priced sales within the city.
It’s easy to confuse this with the ordinary transfer tax every California seller already pays, and that confusion causes real problems at closing. The standard transfer tax is a small, fixed rate on the sale price. Measure ULA is a separate, much larger tax that only kicks in once a sale crosses one of the two thresholds below, and sellers who don’t budget for it separately are often surprised by how much it changes their net proceeds.
The Current Thresholds and Rates
For transactions closing after June 30, 2026, the thresholds are $5,400,000 and $10,900,000. Sales between those two numbers get taxed at 4% of the gross sale price. Sales at or above $10,900,000 get taxed at 5.5%. That “gross sale price” detail matters: the tax applies to the whole price, not the profit or equity in the deal. A seller with a small gain and a seller with a large one pay the same rate on the same sale price.
These thresholds adjust over time, so a number that’s accurate for a sale closing this year may not be the number in effect a year or two from now. Always confirm the current thresholds for your actual closing date rather than working off a figure you saw somewhere else, since the date the sale closes, not the date you list, is what determines which numbers apply.
Where It Applies, and Where It Doesn’t
This is a city tax, not a county tax. It only applies inside LA city limits. Neighborhoods that sit within the city, including large parts of the Westside and the hillside communities, are subject to it. Separate cities that happen to be surrounded by or adjacent to LA, like Beverly Hills, Culver City, and Santa Monica, are not, since they have their own municipal boundaries and their own transfer tax rules. Confirm which side of the line a specific property falls on before assuming either way.
This trips people up more than any other part of Measure ULA, because city boundaries in LA County don’t follow neighborhood names the way most buyers and sellers expect. Two homes that feel like they’re in the same general area can sit on opposite sides of a city line, one inside LA and subject to the tax, the other in a separate incorporated city and exempt. Don’t rely on a neighborhood name to answer this question, check the actual jurisdiction.
Why a 1031 Exchange Doesn’t Help Here
Sellers doing a 1031 exchange sometimes assume it shields them from Measure ULA too, and it doesn’t. A 1031 exchange defers capital gains tax by rolling profit from one investment property into another. Measure ULA isn’t a capital gains tax, it’s a transfer tax charged on the transaction itself, and it’s due at closing regardless of what the seller does with the proceeds afterward.
The Pricing Strategy Worth Understanding
Because the tax applies to the entire sale price once you cross a threshold, where you land relative to $5,400,000 can matter more than it looks. A home that sells for $5,390,000 owes no Measure ULA at all. A home that sells for $5,450,000 owes 4% of the full $5,450,000, which is well over $200,000. Depending on where a property is likely to land in negotiation, pricing and positioning it just under the line can net a seller more after tax than pushing for a higher number above it. This isn’t a reason to underprice a home across the board, but it’s a real conversation to have with your agent before you set a list price near either threshold.
This is general education, not tax advice. Confirm exact numbers, current thresholds, and how they apply to a specific sale with a tax professional or the LA Office of Finance before you list. If you’re weighing where to price a home relative to these thresholds, get in touch and Efrat can walk through the numbers with you before you go to market.
