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1. Home
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3. Real Residential Or Commercial Property Transfer Tax And Measure ULA FAQ

Real Residential Or Commercial Property Transfer Tax and Measure ULA FAQ

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Tax Due

Effective for transactions closing after June 30, 2025, the new thresholds 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 examined 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 real residential or commercial property transfer tax used?

The City's real residential or commercial property transfer tax applies on all documents that communicate real residential or commercial property within the City, unlike residential or commercial property taxes which occur every year. The real residential or commercial property transfer tax is an excise tax on the advantage of selling a real residential or commercial property interest, not a tax on the residential or commercial property itself, and is calculated on the consideration or value of the real residential or commercial property interest communicated.

Does the City enforce a genuine residential or commercial property transfer tax besides the special tax imposed under Measure ULA?

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

What is Measure ULA and how does it work?

Measure ULA established the ULA Tax to money cost effective housing projects and supply resources to renters at danger of homelessness. The ULA Tax is troubled all documents that convey real residential or commercial property within the City of Los Angeles when the factor to consider or value of the genuine residential or commercial property interest communicated goes beyond a limit of five million dollars, or is 10 million dollars or higher, respectively.

What are the rate parts of the Base Tax and the ULA Tax under the City's genuine 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, however under $10,300,000 and 2) 5.5% for residential or commercial properties communicated at $10,300,000 or more (" ULA Rates").

- The specific language for the brand-new rates can be found 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 every single $500 or fractional part thereof. A transfer in which the worth of the residential or commercial property conveyed is not divisible by $500 will be rounded up to the nearby $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 certified conveyances of genuine residential or commercial property interests that occur on or after April 1, 2023.

How will the City apply the April 1 effective date of the ULA Tax?

The City's procedure for applying the ULA Tax is designed on the ownership modification guidelines under California Board of Equalization residential or commercial property tax rule 462.260 for all documents subject to the City's genuine residential or commercial property transfer tax. If a modification of ownership took place before April 1 however is gotten by the county for recording on or after April 1, 2023, the taxpayer will require to provide proof of the real deal date to show that it in fact occurred before the April 1, 2023 effective date of the ULA Tax.

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

Consistent with the Measure ULA, the worth limits of when to apply the ULA Tax and its matching rates are changed each year based upon the Bureau of Labor Statistics Chained Consumer Price Index.

How will the City's real residential or commercial property transfer tax be used to residential or commercial properties that are located partially within the limits of the City?

The real residential or commercial property transfer tax will be used in proportion to the worth of the real residential or commercial property interest that was transferred within the limits of the City. If an assessment of the genuine residential or commercial property interest isn't offered, the genuine residential or commercial property transfer tax should be used based upon the square video of the residential or commercial property within the borders of the City, as a percentage of the total factor to consider or worth of the real residential or commercial property interest communicated.

How will the City deal with over payments or under payments of the real residential or commercial property transfer tax?

If the City, through its compliance process, recognizes a possible over payment or under payment, the City will alert the parties to the transaction of the prospective overpayment or underpayment. In cases of overpayment, taxpayers will require to file a request for refund from the Office of Finance. The Claim for Refund Application can be found 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 a billing for the overdue balance.

Are there any exemptions for the ULA Tax?

Yes, Measure ULA does offer exemptions for the ULA Tax. The ULA Tax will be not be appropriate on documents that convey real residential or commercial property within the City of Los Angeles if the transferee is explained under freshly included areas 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 section 501( c)( 3) with a history of budget friendly housing development and/or budget-friendly housing residential or commercial property management experience.

- A Community Land Trust, or Limited-Equity Housing Cooperative that has a history of economical housing advancement and/or budget-friendly housing residential or commercial property management experience.

- A minimal collaboration or restricted liability business where a recognized 501( c)( 3) nonprofit corporation, community land trust, or limited-equity housing cooperative is a general partner or handling member and such 501( c)( 3) not-for-profit corporation, community land trust, or limited-equity housing cooperative has a history of budget-friendly housing development and/or inexpensive housing residential or commercial property management experience, or such minimal partnership or restricted liability company consists of a partner or member, respectively, that has a history of inexpensive housing advancement and/or budget friendly housing residential or commercial property management experience.

- A neighborhood land trust or limited-equity housing cooperative partnering with a skilled non-profit organization.

- A community land trust or limited-equity housing cooperative that does not show a history of economical housing development and/ or inexpensive housing residential or commercial property management experience which records a cost covenant, constant with area 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 got its initial IRS decision letter classification letter a minimum of ten years prior to the deal and has possessions of less than $1 billion.

- The United States or any company or instrumentality thereof, any state or area, or political neighborhood thereof, or any other federal, state or local public agency or public entity.

- Any entity or company exempt from the City's tax power under the California or U.S. Constitutions.

- All other deals 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 ask for ULA tax exemptions under LAMC Section 21.9.15. To ask for a determination of an entity's exemption from the ULA under 21.9.15( a), please send the following files and info to finance.ula@lacity.org.

- Power of Attorney.

- Legal name.

- Mailing address.

- IRS 501 (c)( 3) determination letter showing the reliable date of the exemption status.

- Newest Form 990 or newest audited monetary statements.


Once the suitable paperwork has actually been provided and a determination of exemption has actually been made, the Office of Finance will supply 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 deal has actually currently happened and the tax was paid, but the purchaser consequently thinks it gets approved for an exemption, they will require to file a refund claim utilizing the type noted above.

Is the same procedure used to determine the Base Tax and the ULA Tax?

For the Base Tax, it is calculated 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 determined based on gross worth (including the worth of any lien or encumbrance remaining thereon at the time of sale.)

If the buyer is presuming the seller's loan, is the assumed loan quantity omitted from the worth of the residential or commercial property conveyed?

For the Base Tax, it is determined based on net worth (special of the presumed loan amount.) For the ULA Tax, it is computed based on gross worth (including the assumed loan amount.)

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

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