HOW WILL THE ULA MANSION TAX IMPACT YOU?

Beginning March 1, 2023 for City of Santa Monica property owners and April 1, 2023  for City of Los Angeles property owners, two new tax measures will have a significant impact on all Real Estate transactions valued at $5 million and above.   If you are considering a sale, the time to act is now.

Measure ULA, a new tax law specific to the city of Los Angeles, will take effect on April 1st, 2023:

- Properties sold at $5 million or above will incur a total transfer tax of an additional 4% & properties sold at $10 million or above will be taxed an additional 5.5%.

Measure GS, a tax law specific to the city of Santa Monica, will take effect on March 1st, 2023:

- Properties sold at $8 million or above will be taxed a total of 5.6%.

It is important to note that this applies to both residential and commercial real estate, but incorporated cities such as Beverly Hills and Malibu are not included. At the point of sale, the one-time tax will be deducted through escrow, regardless of whether the seller is taking a loss on the property or not.

The new tax would be in addition to the existing documentary transfer tax imposed on property sales in the city of Los Angeles, which is imposed at a combined city and county rate of 0.56%. 

The funds will establish the House LA Fund within the city treasury to collect additional tax revenue; and allocate revenue to projects that address housing availability at certain income thresholds and homelessness prevention.

More information and articles on the ULA & MEASURE GS

TAX

1. THE REAL DEAL Op-Ed on ULA TAX

2. BALLOTPEDIA: Santa Monica Measure GS, Property Transfer Tax

3. BALLOTPEDIA: Proposition ULA, Tax on $5 Million House Sales

4. GIBSON DUNN: Measure ULA: New Transfer Tax on Los Angeles Residential Sales Over $5 Million

5. Los Angeles Times Editorial: LA voters backed Measure ULA, a tax on high-value real estate

If enacted, the Homelessness and Housing Solutions Tax would represent a significant increase in the transfer taxes applicable to residential and commercial property sales in the city of Los Angeles valued in excess of $5 million and, as such, is expected to have a significant impact on sales of residential and commercial property in the city of Los Angeles going forward.

Please contact Lisa Gild for more information and updates on this tax, or should you be interested in selling your home.

NOTE: You should consult your own tax, legal and accounting advisors before engaging in any real estate transaction.