Measure ULA, taking effect April 1, 2023

Under the new Measure ULA, sales of residential and commercial real property in the city of Los Angeles valued at over $5 million but less than $10 million would be subject to an additional transfer tax at the rate of 4%, and sales of real property valued at $10 million or more would be subject to an additional tax at the rate of 5.5%.

In contract to the existing documentary transfer tax, the value of the property for purposes of the measure will include the value of any lien or encumbrance remaining on the property when it is sold so that the tax is on the gross value, not just the consideration received.

Moreover, the tax would be due regardless of whether it is being sold at a gain or a loss. The thresholds under the measure will be adjusted each year for inflation. Although Measure ULA becomes law on January 1, 2023, it applies to property sales occurring on or after April 1, 2023.

Please contact me if you have any questions on Measure ULA and how it might impact your next real estate transaction in the city of Los Angeles.