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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 Repeal Effort Is Over

For a while, sellers had a reason to watch the November ballot. A statewide initiative called the Local Taxpayer Protection Act would have forced taxes like Measure ULA back to the voters. That measure was withdrawn on June 25, 2026, as part of a deal with the Legislature. It will not be on the ballot.

What is on the November ballot is Proposition 43. It raises the approval bar for future local special taxes proposed by citizen initiative after January 21, 2027. It does not touch taxes already on the books. Measure ULA is not affected.

The planning consequence is simple. Treat Measure ULA as a permanent cost of selling in the City of Los Angeles. There is no election outcome to wait for.

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

There is no ballot outcome to wait for. ULA is a known cost.

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?

Not at the November 2026 election. The statewide measure that would have weakened it was withdrawn in June 2026, and the measure that remains on the ballot, Proposition 43, only affects future initiative taxes. Any change to Measure ULA now has to come from within the City. Plan on the basis that it continues to apply.

Selling Above the Threshold?

Have us model Measure ULA first.

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