If you’re planning to buy or sell real estate in Los Angeles City, it’s crucial to stay informed about changes to local tax regulations that could significantly impact your transaction. Starting July 1, 2025, new thresholds under Measure ULA, commonly referred to as the “Mansion Tax,” will take effect for all transactions closing after June 30, 2025.
Here’s what you need to know about this update and how it affects buyers, sellers, and real estate professionals across Los Angeles.
What is Measure ULA (The Mansion Tax)?
Originally implemented in April 2023, Measure ULA (United to House L.A.) imposes an additional transfer tax on high-value property sales within the City of Los Angeles. The goal of this measure is to generate funds for affordable housing and homelessness prevention.
This is in addition to the standard Los Angeles County Documentary Transfer Tax of $1.10 per $1,000 of consideration.
New Measure ULA Thresholds (Effective July 1, 2025)
Under the updated guidelines, the following tiered tax rates will apply to property transfers within Los Angeles City:
- 0.45% on transaction amounts between $100 and $5,300,000
- 4% on amounts from $5,300,001 to $10,600,000
- 5.5% on amounts over $10,600,000
This represents a significant adjustment from previous thresholds and will primarily impact mid- to high-value transactions.
What Are Documentary Transfer Taxes?
A documentary transfer tax is a fee imposed by counties and cities when ownership of real property changes hands. It applies when the value of the property, excluding existing liens or encumbrances, exceeds $100.
In Los Angeles County, the standard rate is $1.10 per $1,000 of the property’s value. The City of Los Angeles adds its own layer on top of this amount through Measure ULA, depending on the sale price.
Who Calculates the Tax?
Unlike other jurisdictions, Los Angeles County places the responsibility for calculating documentary transfer taxes on the document preparer—typically, that means the escrow or title company, not the County Recorder.
It’s vital that real estate professionals verify these calculations carefully to ensure compliance and avoid costly errors at closing.
City of Los Angeles vs. Incorporated Cities: Why It Matters
One common point of confusion among homebuyers and sellers is whether a property lies within the City of Los Angeles or an incorporated city (like Beverly Hills, Santa Monica, or West Hollywood).
Properties located within the City of Los Angeles are subject to Measure ULA, while those in incorporated cities are not. If you’re unsure, check the property’s jurisdiction using the ZIMAS (Zone Information and Map Access System) tool or consult your title representative.
Conclusion: Prepare Ahead for Mid-Year Transactions
With these new thresholds going into effect July 1, 2025, anyone involved in a property transaction within Los Angeles City should factor in the updated Measure ULA rates well in advance. Whether you’re a seller preparing your net sheet or a buyer finalizing costs, understanding how these changes impact your bottom line is essential.Not sure how these new rates might affect your transaction?
Reach out to a trusted real estate professional or escrow officer today to walk through the numbers.