Measure ULA: The Los Angeles Transfer Tax That Applies to the Whole Price, Not Your Profit
by Stephen Morris CPA, MBT, CCIM
Measure ULA is a City of Los Angeles transfer tax on real estate sales above approximately $5.4 million.
It is often called the “mansion tax”, but that description is misleading. The tax also applies to apartment buildings, commercial properties and land—not just luxury homes.
Measure ULA is charged on the entire sale price rather than on the seller’s profit. It may therefore apply even when a property is sold at a loss.
On a qualifying sale, it can add 4% or 5.5% to the cost of the transaction. It should be included in the hold-or-sell calculation before the property is listed, rather than appearing as an unwelcome surprise during escrow.
What Measure ULA Taxes and How Much It Costs
As of July 2026, Measure ULA imposes:
- A 4% tax on qualifying sales from approximately $5.4 million to $10.9 million
- A 5.5% tax on qualifying sales of approximately $10.9 million or more
The important word is entire.
A sale at $5.5 million is taxed on the full $5.5 million, not merely on the portion above the threshold.
At a 4% rate, that creates a tax bill of:
$220,000
Because Measure ULA is a transfer tax, it applies to the sale price rather than the profit. Even if you sell the property for less than you paid, the tax may still be due.
Who Measure ULA Actually Affects
The “mansion tax” nickname causes real confusion because it leads many property owners to assume the tax does not apply to them.
It can apply to:
- Apartment buildings
- Office properties
- Retail premises
- Development land
- Commercial buildings
- High-value residential properties
In practice, Measure ULA can have a particularly significant effect on multifamily and commercial property sellers—the very owners most likely to assume that a tax associated with mansions is irrelevant to them.
A 1031 Exchange Does Not Make It Disappear
A 1031 exchange may defer federal and state income tax on a qualifying gain.
Measure ULA is different. It is a city transfer tax imposed on the sale itself.
Completing a 1031 exchange does not generally eliminate the Measure ULA liability.
This catches owners out because they carefully plan the income-tax side of the transaction while overlooking the separate transfer tax due at closing.
The November 2026 Wildcard
A statewide ballot proposal known as the Local Taxpayer Protection Act is scheduled for the November 3, 2026 ballot.
If passed, it could override Measure ULA and significantly limit local transfer taxes. If it fails, Measure ULA would remain in place under its current structure.
For owners considering a sale in late 2026, the election result may therefore become an important timing factor.
The sensible approach is to model the transaction under both outcomes before committing to a sale timetable.
How We Plan Around Measure ULA
Timing, structure and sale price can all matter, particularly when the expected price is close to one of the thresholds.
Depending on the circumstances, the best decision may be to:
- Sell below the threshold
- Continue holding the property
- Price the tax into the transaction
- Adjust the timing of the sale
- Proceed with full knowledge of the cost
The November ballot adds another variable to the analysis.
We include Measure ULA in the decision before the property is listed, so it becomes a cost you have deliberately accepted rather than one discovered at closing.
Does Measure ULA Apply to Apartment Buildings?
Yes.
It can apply to residential, commercial and land sales above the relevant threshold.
The “mansion tax” nickname is misleading.
Is the Tax Charged Only on the Amount Above $5.4 Million?
No.
Once the sale price crosses the applicable threshold, the tax is charged on the entire sale price.
Do I Owe Measure ULA If I Sell at a Loss?
Potentially, yes.
It is a transfer tax based on the sale price, not a tax based on the profit.
Can a 1031 Exchange Avoid Measure ULA?
No.
A 1031 exchange may defer income tax on the gain, while Measure ULA is a separate city transfer tax imposed on the sale.
Could Measure ULA Be Repealed or Reduced?
A statewide ballot measure scheduled for November 2026 could significantly weaken or override it.
Until the result and any effective dates are known, sellers should plan on the basis that Measure ULA continues to apply.
Selling Above the Threshold?
Have us model Measure ULA first.
Tell us what you own, and where you're headed.
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