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Opened Jun 20, 2025 by Astrid Jolley@astrid19681047
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Real Residential Or Commercial Property Transfer Tax And Measure ULA FAQ


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Real Residential Or Commercial Property Transfer Tax and Measure ULA FAQ

List prices Calculate tax

Tax Due

Effective for deals closing after June 30, 2025, the new limits for ULA will be $5,300,000 and $10,600,000. Transactions above $5,300,000 but under $10,600,000 will be assessed a 4% tax and deals $10,600,000 and up will be evaluated a 5.5% tax.

- Link to United to House LA (ULA) Dashboard (Los Angeles Housing Department).
- Link to Source Data


How typically is the City's genuine residential or commercial property transfer tax used?

The City's genuine residential or commercial property transfer tax is suitable on all files that convey genuine residential or commercial property within the City, unlike residential or commercial property taxes which take place annually. The genuine residential or commercial property transfer tax is an excise tax on the advantage of offering a real residential or commercial property interest, not a tax on the residential or commercial property itself, and is determined on the factor to consider or value of the real residential or commercial property interest communicated.

Does the City enforce a genuine residential or commercial property transfer tax other than the unique tax imposed under Measure ULA?

Yes, the City enforces a real residential or commercial property transfer tax on all files that convey genuine residential or commercial property within the City. The present tax (" Base Tax") is calculated based upon the consideration or worth of the real residential or commercial property interest communicated at a rate of 0.45%. The unique tax under Measure ULA (" ULA Tax") imposes an extra tax on top of the Base Tax.

What is Measure ULA and how does it work?

Measure ULA established the ULA Tax to fund affordable housing jobs and provide resources to renters at danger of homelessness. The ULA Tax is troubled all documents that communicate real residential or commercial property within the City of Los Angeles when the factor to consider or worth of the genuine residential or commercial property interest communicated exceeds a limit of five million dollars, or is ten million dollars or higher, respectively.

What are the rate elements of the Base Tax and the ULA Tax under the City's real residential or commercial property transfer tax?

The rate components are as follows:

- The Base Tax rate of $2.25 per $500 or part thereof (" Base Rate").
- The ULA Tax rates of, 1) 4% for residential or commercial properties conveyed over $5,150,000, but under $10,300,000 and 2) 5.5% for residential or commercial properties conveyed at $10,300,000 or more (" ULA Rates").
- The particular language for the new rates can be discovered here: https://clkrep.lacity.org/onlinedocs/2022/22-1100-S2_ord_187692_1-1-23.pdf.
- The chart below is summary of the rates:.

  • Note: the City's Base Rate is $2.25 for each $500 or fractional part thereof. A transfer in which the worth of the residential or commercial property communicated is not divisible by $500 will be rounded up to the nearest $500 for the estimation of the Base Tax. This does not apply to the ULA Rate estimations, which are percentage-based.

    When did the ULA Tax go into impact?

    The ULA Tax is applicable to qualified conveyances of real residential or commercial property interests that occur on or after April 1, 2023.

    How will the City use the April 1 efficient date of the ULA Tax?

    The City's treatment for using the ULA Tax is designed on the ownership change guidelines under California Board of Equalization residential or commercial property tax rule 462.260 for all files subject to the City's genuine residential or commercial property transfer tax. If a modification of ownership happened before April 1 however is gotten by the county for tape-recording on or after April 1, 2023, the taxpayer will need to supply evidence of the real deal date to show that it actually happened before the April 1, 2023 efficient date of the ULA Tax.

    Will the worth thresholds under the ULA Tax be adjusted yearly?

    Consistent with the Measure ULA, the value limits of when to use the ULA Tax and its corresponding rates are adjusted yearly based upon the Bureau of Labor Statistics Chained Consumer Price Index.

    How will the City's genuine residential or commercial property transfer tax be used to residential or commercial properties that are situated partially within the boundaries of the City?

    The genuine residential or commercial property transfer tax will be used in proportion to the worth of the real residential or commercial property interest that was moved within the borders of the City. If an evaluation of the real residential or commercial property interest isn't readily available, the genuine residential or commercial property transfer tax should be used based upon the square footage of the residential or commercial property within the boundaries of the City, as a percentage of the overall consideration or worth of the real residential or commercial property interest conveyed.

    How will the City handle over payments or under payments of the genuine residential or commercial property transfer tax?

    If the City, through its compliance procedure, recognizes a prospective over payment or under payment, the City will alert the parties to the deal of the potential overpayment or underpayment. In cases of overpayment, taxpayers will need to file an ask for refund from the Office of Finance. The Claim for Refund Application can be discovered here:

    https://finance.lacity.gov/sites/g/files/wph1721/files/2021-04/refundclaim%20%281%29.pdf

    In case of underpayment, the taxpayer will receive an invoice for the unpaid balance.

    Exist any exemptions for the ULA Tax?

    Yes, Measure ULA does supply exemptions for the ULA Tax. The ULA Tax will be not apply on files that communicate real residential or commercial property within the City of Los Angeles if the transferee is described under recently added sections 21.9.14 and 21.9.15 of the Los Angeles Municipal Code (" LAMC"). The transferee descriptions are as follows:

    Qualified Affordable Housing Organizations under LAMC Section 21.9.14

    - A non-profit entity within Internal Revenue Code area 501( c)( 3) with a history of budget-friendly housing development and/or budget friendly housing residential or commercial property management experience.
    - A Neighborhood Land Trust, or Limited-Equity Housing Cooperative that has a history of budget friendly housing advancement and/or budget friendly housing residential or commercial property management experience.
    - A restricted collaboration or business where a recognized 501( c)( 3) not-for-profit corporation, community land trust, or limited-equity housing cooperative is a basic partner or managing member and such 501( c)( 3) nonprofit corporation, community land trust, or limited-equity housing cooperative has a history of budget friendly housing advancement and/or budget-friendly housing residential or commercial property management experience, or such minimal partnership or restricted liability business includes a partner or member, respectively, that has a history of inexpensive housing development and/or affordable housing residential or commercial property management experience.
    - A neighborhood land trust or limited-equity housing cooperative partnering with an experienced non-profit company.
    - A community land trust or limited-equity housing cooperative that does not show a history of cost effective housing development and/ or economical housing residential or commercial property management experience which tapes a cost covenant, consistent with section 22.618.3( d)( 1 )( i). b. of the Los Angeles Administrative Code, on the residential or commercial property at the time of the acquisition.

The Los Angeles Housing Department administers demands for ULA tax exemptions under LAMC Section 21.9.14.

Other Exemptions under LAMC Section 21.9.15

- A recognized 501( c)( 3) entity which received its initial IRS determination letter designation letter a minimum of 10 years prior to the transaction and has assets of less than $1 billion.
- The United States or any agency or instrumentality thereof, any state or territory, or political subdivision thereof, or any other federal, state or regional public firm or public entity.
- Any entity or agency exempt from the City's taxation power under the California or U.S. Constitutions.
- All other transactions which are exempt from the base Real Residential or commercial property Transfer Tax per regional, state, or federal laws and regulations.
The Office of Finance administers requests for ULA tax exemptions under LAMC Section 21.9.15. To request a determination of an entity's exemption from the ULA under 21.9.15( a), please submit the following documents and details to finance.ula@lacity.org.

- Power of Attorney.
- Legal name.
- Mailing address.
- IRS 501 (c)( 3) determination letter showing the efficient date of the exemption status.
- Newest Form 990 or newest audited financial statements.
Once the appropriate documents has actually been supplied and a determination of exemption has been made, the Office of Finance will provide a letter accrediting that deals where the entity is the buyer/transferee are exempt from the tax. The letter benefits one year from the date of the letter.

If a transaction has currently occurred and the tax was paid, however the buyer consequently believes it receives an exemption, they will need to file a refund claim utilizing the kind kept in mind above.

Is the same procedure utilized to identify the Base Tax and the ULA Tax?

For the Base Tax, it is determined based on net value of the residential or commercial property communicated (special of the value of any lien or encumbrance staying thereon at the time of sale.) For the ULA Tax, it is calculated based upon gross worth (consisting of the worth of any lien or encumbrance remaining thereon at the time of sale.)

If the purchaser is presuming the seller's loan, is the assumed loan amount omitted from the value of the residential or commercial property communicated?

For the Base Tax, it is determined based upon net worth (special of the presumed loan amount.) For the ULA Tax, it is calculated based upon gross worth (consisting of the presumed loan amount.)

If you have any questions concerning the ULA Tax, please contact finance.ula@lacity.org or (213) 635-7277.

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Office of Finance Special Desk Unit 200 North Spring Street, Room 101 Los Angeles, CA 90012

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Reference: astrid19681047/cuulonghousing#54