LA's ULA Mansion Tax: A Generational Hit on Property Owners

The following article is provided by Loophole Lawyer, PC for general informational purposes only. This article does not constitute legal advice nor does it create an attorney-client relationship. Each circumstance and case is fact dependent—if you have questions about your case, call our office for a free consultation.

Selling a high-end home or commercial property in Los Angeles has never been more expensive. Under Measure ULA, commonly called the “Mansion Tax”, sellers face massive new transfer taxes that can devastate family wealth and slow down the city’s housing pipeline.

For example: if you sell a $6 million property today in Los Angeles, you’ll owe $240,000 in ULA tax alone—before capital gains tax, broker fees, or closing costs. For families with mortgages and children counting on inheritance, that’s more than just a line item—it’s a generational hit.

What Is Measure ULA?

Voters passed Measure ULA in 2022, implementing a:

• 4% tax on property sales over $5.15 million

• 5.5% tax on sales over $10.3 million

While often branded as a “mansion tax,” the law applies broadly—not just to high-end homes. Multifamily buildings, office towers, and industrial assets are also taxed, making it a sweeping measure across the Los Angeles real estate market.

The stated purpose? To raise billions to combat homelessness and fund affordable housing projects.

The Fallout: Development Slows, Transparency Questions Rise

Critics argue Measure ULA has backfired:

• 📉 Housing permits down 20% — UCLA and RAND report a sharp decline in building permits since the tax took effect.

• 🏗 Development stalling — With interest rates already high, the extra tax burden discourages new construction and investment.

• 💸 Poor fund management — City audits show Los Angeles failed to track $2.4 billion in homelessness funds, with $513 million going unspent in 2023 due to inefficiency and bureaucracy.

Meanwhile, Measure ULA has raised approximately $632 million—but questions remain: is the money being put to work effectively, or is it stuck in red tape?

Limited Relief: Exemptions and Carve-Outs

High-profile developers, including Rick Caruso and Steadfast LA, are pushing for exemptions, especially for homeowners in recently fire-damaged areas who risk losing everything if forced to sell under these conditions.

This has led savvy investors to pivot. Instead of investing in LA City properties subject to the tax, they are increasingly targeting tax-exempt municipalities within LA County, such as:

• Beverly Hills

• Calabasas

• Glendale

• Culver City

• Hidden Hills

• Malibu

• Manhattan Beach

• Pasadena

• Santa Monica

• Sherman Oaks

• Studio City

• West Hollywood

For buyers and sellers alike, the trend is clear: avoid the ULA tax burden if you can.

Is the Mansion Tax Solving LA’s Problems?

The intention behind Measure ULA—funding affordable housing and addressing homelessness—is noble. But in practice, the tax may be:

• Reducing development instead of encouraging it

• Discouraging sales of multifamily and commercial properties

• Failing to provide accountability for billions in housing funds

For property owners, this creates both uncertainty and opportunity. With proper legal structuring and market awareness, there may still be strategies to minimize exposure and preserve long-term wealth.