In the City of Los Angeles, a home that closes at $5,400,000 owes no Measure ULA tax. A home that closes at $5,400,001 owes about $216,000. Both thresholds took effect for transactions closing after June 30, 2026. The Office of Finance sets the rate at 4% for sales above $5,400,000 and under $10,900,000, and 5.5% for sales at $10,900,000 or more.
The tax is charged on the whole price. It does not apply only to the dollars above the threshold. That one rule makes the city's top price range work differently from most of Southern California. Above each threshold there is a band where a higher price leaves the seller with less money. Sellers, buyers and their agents tend to price around that band.
The math at $5,400,001
Measure ULA is added to the city's ordinary Base Tax of 0.45%. The Office of Finance rate table puts the combined city rate at 0.45% up to $5,400,000, 4.45% from there to just under $10,900,000, and 5.95% at $10,900,000 and above. LA County also charges its own documentary transfer tax of $0.55 per $500, about 0.11%, on every sale.
Here is what the seller keeps after city and county transfer taxes at several prices near each line. Commissions and other closing costs are not included.
| Sale price | Combined city rate | City + county transfer tax | Proceeds after transfer tax |
|---|---|---|---|
| $5,400,000 | 0.45% | about $30,240 | about $5,369,760 |
| $5,400,001 | 4.45% | about $246,240 | about $5,153,760 |
| $5,500,000 | 4.45% | about $250,800 | about $5,249,200 |
| $5,630,000 | 4.45% | about $256,730 | about $5,373,270 |
| $10,899,999 | 4.45% | about $497,040 | about $10,402,960 |
| $10,900,000 | 5.95% | about $660,540 | about $10,239,460 |
Near the first line, a buyer has to pay roughly $5.63 million before the seller nets more than a sale at exactly $5,400,000. Near the second line, the break-even price is about $11.07 million. Offers between $5.4 million and about $5.63 million, or between $10.9 million and about $11.07 million, leave the seller with less money than a lower price would. A seller weighing an offer of $5.5 million against $5.4 million is choosing between about $5.25 million and about $5.37 million in proceeds, before any other costs.
Two details make the gap harder to manage. ULA is calculated on gross value, and that includes any lien or assumed loan still on the property at transfer. The Base Tax uses a net-value calculation. The tax is imposed on the document that conveys the property. Who bears the cost is left open. Sellers usually budget for it as a closing cost, but the parties can divide it, and negotiation can move part of the cost to the buyer through the price. So a $5.45 million offer that comes with a request for a seller credit is really a question about who pays $216,000.
The line moved on July 1, and comps did not move with it
The city adjusts both thresholds each year using the Bureau of Labor Statistics Chained Consumer Price Index. The LA County Recorder's historical bulletin and the Office of Finance list recent cutoffs as follows:
- From July 1, 2024: 4% above $5,150,000 and under $10,300,000. 5.5% at $10,300,000 or more.
- From July 1, 2025: 4% above $5,300,000 and under $10,600,000. 5.5% at $10,600,000 or more.
- From July 1, 2026: 4% above $5,400,000 and under $10,900,000. 5.5% at $10,900,000 or more.
This affects every comparable sale near the line. A home that closed at $5,350,000 in the spring of 2026 owed $214,000 in ULA. The same price closing this October owes none. A spring sale at $5.35 million therefore came from a seller who accepted the tax, or from a buyer who paid enough to make it worthwhile. That makes it a poor guide to what an identical home would bring today.
Sales that clustered just under $5.3 million last year sat below a line that has since moved up by $100,000. A seller pricing this fall can list between $5.3 million and $5.4 million and pay no ULA. That price range was taxed on every sale for the previous twelve months. The upper line moved from $10,600,000 to $10,900,000, so homes between those two prices now pay 4% instead of 5.5%.
Evidence that the market avoids the band
Studies of how sellers react to the line consistently find avoidance. Their estimates vary. In an April 2025 report from the UCLA Lewis Center, Michael Manville and Mott Smith estimated that ULA cut the odds of a Los Angeles transaction selling above the threshold by as much as 50%. They also estimated a 30% to 50% drop in transactions other than single-family homes.
A 2025 UCLA working paper by Yingru Pan summarizes earlier studies done after the tax took effect. Those studies found about a 50% drop in sales above $5 million, plus prices clustering just below the threshold. Pan also reports that more high-end owners remodeled instead of selling, and describes this as a way to avoid the tax. In August 2026, an article in the Journal of Public Economics put the drop in high-value transactions at about 50%.
These are estimates. Supporters of Measure ULA have disputed studies that blame the tax for declines in housing development. The research describes how the market behaves as a whole. It does not show what any one seller did. For a buyer, the finding is useful anyway. Inventory just above $5.4 million may be thin, because owners who would have listed there either priced below the line or chose to remodel.
The address on the listing may not decide the tax
Measure ULA applies only to property inside City of Los Angeles limits. The physical location counts, not the city printed in the mailing address. This matters in a region where many addresses say Los Angeles. LA County Planning warns that residents of unincorporated areas may have mailing addresses that name a neighboring city. East Los Angeles, for example, is unincorporated county land and is not part of the City of Los Angeles.
The mix-up can go the other way at the high end. Brentwood and Pacific Palisades are both listed in the city's Council District 11. A 1989 Los Angeles Times report described the Beverly Hills Post Office area as having Beverly Hills mailing addresses even though it sat outside Beverly Hills city limits. Apart from a small county island, most of it was in the City of Los Angeles. That report is decades old and only shows how the problem arises. The Office of Finance address search is the place to check a specific parcel, and the city asks owners of parcels on a boundary to contact it directly. A property that straddles the city line is taxed in proportion to the value located inside the city. If no in-boundary valuation exists, the city uses square footage.
Leaving city limits does not always remove a transfer-tax cliff. Malibu is its own municipal corporation. Santa Monica has its own tiers. Its published schedule charges $3.00 per $1,000 below $5 million and $6.00 per $1,000 from $5 million to $7,999,999.99. Starting March 1, 2023, under Measure GS, it charges $56.00 per $1,000 at $8 million or more, and the county's $0.55 per $500 is added on top. Santa Monica's cliffs are at different prices. A buyer comparing homes in Brentwood and Santa Monica near those price levels is comparing two separate tax schedules.
What the 2026 fights left in place
Most of this year's attempts to change the cliff are over, and the tax is unchanged. On December 15, 2025, the California Court of Appeal upheld the dismissal of the Howard Jarvis Taxpayers Association's challenge. The court ruled that passing Measure ULA by majority vote was a valid use of the voters' initiative power.
The association's statewide measure to eliminate ULA and similar taxes was headed for the November ballot. As LAist reported on June 26, 2026, the sponsor withdrew it after a deal in Sacramento that, according to Mott Smith, leaves existing transfer taxes untouched. Assembly Bill 736 would have capped the rate at 1.5% for properties that are not mansions, such as apartment buildings and commercial property. LAist described its future as uncertain. Days later, the City Council voted 14–0 to shelve a city ballot measure that would have exempted new apartment buildings from ULA for their first ten years.
One question is still open, and it is narrow. City of Los Angeles Proposition TE is on the November 3, 2026 ballot. It would give a one-time ULA refund or exemption for residential property damaged or destroyed in the Palisades Fire. The sale would have to be made by the person who owned the property on January 7, 2025, and close between January 7, 2025 and January 6, 2030. The measure would remove the cliff only for that group of owners and only during that window. Statewide Proposition 43 would require a two-thirds vote for voter-proposed local special taxes approved after January 1, 2027. It does not repeal or change the existing ULA rates.
FAQ
Does Measure ULA apply only to the amount above $5.4 million? No. The 4% and 5.5% rates apply to the full value of the sale once it crosses the threshold, on top of the 0.45% Base Tax.
Will the threshold change again? The city adjusts it every year using chained CPI. The next change would apply to closings after June 30, 2027. Neither the city nor the County Recorder has published that figure.
Does a Palisades Fire owner who already sold and paid ULA have any recourse? If Proposition TE passes, it provides a one-time refund for qualifying sales by the owner of record, dating back to January 7, 2025. Whether a particular sale qualifies is a question for a tax or legal advisor.
Pricing a home near $5.4 million or $10.9 million in the City of Los Angeles starts with confirming the parcel's jurisdiction and working out the after-tax result at each likely offer, with your tax advisor checking the figures. Mint Real Estate can run those numbers for your property against comparable sales from the current July-to-June tax year, so your list price is set with the threshold in view.
