Measure ULA Transfer Tax: It's Here to Stay, See 2027 Outlook

What happened: Recent analysis confirms that the City of Los Angeles's Measure ULA transfer tax—often called the 'mansion tax'—is fully in effect with no repeal path on the calendar through at least 2027. The tax thresholds were updated on July 1, 2026, setting a 4% tax on sales over $5.4 million and a 5.5% tax on sales over $10.9 million.

On August 6, 2026, commentary from real estate legal and financial analysts affirmed a reality for the Los Angeles property market: Measure ULA is an entrenched closing cost for the foreseeable future. Since taking effect on April 1, 2023, the tax has reshaped the financial landscape for high-value transactions within the City of Los Angeles, and there is no active ballot measure or legal proceeding expected to change that before the next threshold adjustment in mid-2027.

What changed

The most recent change to Measure ULA was the annual inflation adjustment to its thresholds, which became effective for all transactions closing on or after July 1, 2026. The Los Angeles Office of Finance sets these figures. The new tiers are:

• 4% tax on the full property value for sales from $5,400,000 up to, but not including, $10,900,000.
• 5.5% tax on the full property value for sales of $10,900,000 or more.

It is critical to remember this tax applies to the entire sale price, not just the amount over the threshold. A $6 million sale does not pay 4% on the $600,000 above the line; it pays 4% on the full $6 million, which amounts to a $240,000 tax. This is in addition to the city's base Real Property Transfer Tax and the county's documentary transfer tax.

While these numbers are new, the bigger news is the policy confirmation. The tax has survived initial legal challenges and is now a significant revenue generator for the city's affordable housing and homelessness prevention programs. According to published reports analyzing city data, Measure ULA generated nearly $1.2 billion from approximately 1,633 transactions between its start date of April 1, 2023, and April 30, 2026. This financial integration into the city budget makes any future repeal effort increasingly difficult.

When does it take effect?

Measure ULA has been in place for several years, but the dates remain critical for planning transactions. Here is the timeline of key events, past and future:

What this means in the South Bay and on the Westside

For agents and homeowners, the most important detail of Measure ULA is its strict jurisdictional boundary. This is a City of Los Angeles tax only. It does not apply to any of the other 87 cities in Los Angeles County.

This creates a stark financial divide across our local markets:

Affected Areas (Inside LA City): Luxury properties in Westside neighborhoods like Venice (90291), Playa Vista (90094), and Westchester (90045) are directly impacted. A $10 million home sale in Venice triggers a $400,000 ULA tax. For jumbo commercial or multifamily properties, the tax can easily run into the millions.

Unaffected Areas (Outside LA City): Neighboring cities like Manhattan Beach, Hermosa Beach, Redondo Beach, El Segundo, and Culver City are completely exempt from Measure ULA. A $10 million sale in Manhattan Beach has zero ULA tax liability. While these cities have their own standard transfer taxes, they are fractions of the ULA amount.

This tax differential has major consequences. We see sellers in LA City needing to price their homes with the tax in mind, as it dramatically cuts into their net proceeds. A seller of a $12 million home in an LA City part of Pacific Palisades, for example, faces a $660,000 ULA tax payment at closing. That same home, if located a few blocks away in an unincorporated area or a different municipality, would be exempt.

Verifying a property's exact jurisdiction is the single most important first step. ZIP codes and mailing addresses can be misleading. As title professionals, we use parcel maps and county records to give a definitive answer, which is essential before a property is even listed.

What agents and homeowners should do now

With Measure ULA confirmed as a fixture of the LA real estate market, proactive planning is essential. Here are the steps to take now:

1. Verify Jurisdiction Immediately. Before listing a property or writing an offer, confirm if the Assessor's Parcel Number (APN) falls within the City of Los Angeles. Do not rely on the mailing address or ZIP code. We can provide a definitive jurisdictional report. The Los Angeles County Registrar-Recorder is the ultimate source of truth for property location data.

2. Update Your Net Sheet Calculations. For sellers in the City of LA, the net sheet is the most important document. Ensure it correctly calculates the ULA tax on the full sale price using the appropriate 4% or 5.5% rate. An error here can cost a client hundreds of thousands of dollars in a surprise closing cost.

3. Educate Clients on the Tax's Permanence. Set clear expectations. This is not a temporary fee or a negotiable item with the city. Frame it as a fixed cost of selling high-value property in Los Angeles, similar to capital gains tax. There is no near-term relief expected.

4. Factor the Tax into Pricing and Negotiation Strategy. For a listing over $5.4 million in LA City, the ULA tax is a major factor. It may influence the list price or how parties negotiate other costs, like repairs or credits. Buyers should also be aware, as a seller's massive tax burden can impact their willingness to negotiate.

5. Consult Title Professionals Early for Complex Deals. If the transaction involves a trust, an LLC, a partnership, multiple parcels, or a transfer of partial interests, contact us immediately. The ULA calculation can become complex, as the city looks at the total "consideration" paid. We can help analyze the structure and ensure compliance, preventing delays or post-closing liabilities.

Open questions

While the tax is here to stay, a few elements remain in motion:

• Pacific Palisades Exemption: A measure to exempt the Pacific Palisades neighborhood from Measure ULA has been reported. It is unclear if this will qualify for the ballot or if it has any chance of passing, but it is something to watch for homeowners in that specific area.
• July 1, 2027 Thresholds: The exact thresholds for the next adjustment on July 1, 2027, are not yet known. They will depend on inflation over the next year and will be announced by the LA Office of Finance closer to the date.
• Enforcement on Entity Transfers: The city is still refining its approach to enforcing ULA on complex transfers of ownership interests in entities (like LLCs) that own property. We expect continued scrutiny in this area.

Sources

• City of Los Angeles, Office of Finance: Real Property Transfer Tax and Measure ULA FAQ
• Los Angeles County Registrar-Recorder/County Clerk

FAQ

Is the Measure ULA tax paid on the full sale price?

Yes. The Measure ULA tax is calculated on the entire sale price or property value, not just the amount that falls above the threshold. For example, a $7 million sale is taxed at 4% on the full $7 million.

What are the Measure ULA thresholds for 2026?

For any transaction closing on or after July 1, 2026, the 4% tax rate applies to properties sold for $5.4 million up to, but not including, $10.9 million. The 5.5% tax rate applies to properties sold for $10.9 million or more.

Does Measure ULA apply in Redondo Beach or Culver City?

No. Measure ULA does not apply in Redondo Beach or Culver City, as they are independent municipalities. The tax only applies to properties located within the jurisdictional boundaries of the City of Los Angeles.

Is there a way to avoid the ULA tax?

The only way to avoid the tax is to sell for a price under the $5.4 million threshold or to sell a property located outside the City of Los Angeles. Any attempts to artificially structure a deal to evade the tax can carry significant legal and financial penalties.

Is Measure ULA being repealed?

No. All recent analysis indicates that Measure ULA will remain in effect through at least 2027. There are no viable legal challenges or ballot initiatives on the immediate horizon that are expected to repeal the tax.

For any transaction in the South Bay or on the Westside, especially for properties near the $5.4 million mark, getting the tax details right is paramount. Before you open your next deal, contact us, Matt Goeglein and Xavier de la Piedra IV, at Fidelity National Title. We can verify the property's jurisdiction and ensure your closing statement is calculated correctly from the start.