Measure ULA (The Mansion Tax): What Sellers Need to Know

The Mansion Tax Sounded Like a Great Idea

Taxing the rich to solve homelessness. As political slogans go, it is hard to argue with. Measure ULA passed with 58% of the vote in 2022, which tells you everything about how well it was branded.

The mansion tax. Catchy. Righteous. Popular.

The problem is that three years in, it has not really worked.

What it actually does

Measure ULA puts a 4% transfer tax on property sales within the City of Los Angeles between $5.3 million and $10.6 million, rising to 5.5% above that. The thresholds adjust for inflation annually. It is paid by the seller at closing.

On a $5.4 million sale that is roughly $216,000. On a $10.9 million sale, around $600,000. Not a rounding error.

And despite the name, it is not limited to mansions. It applies to residential, commercial, and multifamily properties alike. A lot of sellers have discovered that later than they should have.

What it set out to do

The measure was designed to generate between $600 million and $1.1 billion annually for affordable housing and homelessness prevention. A permanent funding stream, the city said, to tackle one of LA's most intractable problems.

What actually happened

Collections have averaged around $288 million a year. Less than half the lowest projection.

High-value property sales in the City of Los Angeles fell by around 50% after the tax went into effect, according to research from UCLA and the RAND Institute. Owners above the threshold are simply choosing not to sell. The tax has also had a significant chilling effect on multifamily construction, with researchers estimating roughly 1,900 fewer new apartments built per year as a result, including affordable units. A tax designed to fund affordable housing has contributed to less of it being built.

And homelessness in Los Angeles? Still one of the worst in the country.

The measure has raised over $1.2 billion since April 2023 and funded some genuinely useful programs. Nobody is saying the money has gone nowhere. But it has not come close to what was promised, and the unintended consequences have been real.

What this means if you are selling

The cliff effect is the thing most sellers do not know about until it is too late. The tax applies to the full sale amount once you cross the threshold, not just the portion above it. A property at $5.29 million pays nothing. One at $5.31 million pays 4% on the entire amount. That is a pricing conversation worth having early, not after you have accepted an offer.

Also worth confirming: Measure ULA applies specifically to the City of Los Angeles. Beverly Hills, Santa Monica, West Hollywood, these are separate incorporated cities and are not subject to it. Your mailing address is not the determining factor. Your property boundaries are.

There is also a statewide ballot initiative backed by the Howard Jarvis Taxpayers Association targeting November 2026 that could significantly limit or dismantle the measure. If your timing has any flexibility, that is worth watching.

The bottom line

The mansion tax was a great punchline. The execution has been messier. If your property sits near or above the threshold, get this into your strategy conversation from the start.

I am happy to help you work through the numbers.

Anj Catalano, The Agency | 310.404.6955 | hello@anjinla.com