Measure ULA, known as the “Homelessness and Housing Solutions Tax,” was a voting measure in Los Angeles that was recently approved in the 2022 LA County Midterms.
Measure ULA will impose a new and additional transfer tax on real estate valued at more than $5 million. This will apply to both residential and commercial transactions. This will take effect on real estate transactions occurring on or after April 1, 2023. The amount of the tax will be as follows:
- If the property consideration is over $5m, but less than $10m, the tax will be 4%
- If the property consideration is over $10m, the tax will be 5.5%
* These $5 million and $10 million thresholds will adjust annually based on inflation.
Furthermore, this transfer tax will be in addition to the fees already charged in LA real estate transactions, such as city & county documentary transfer taxes
-In the event that the sale price of a property is $6,000,000, the ULA tax payable will equal $240,000.
-In the event that the sale price of a property is $23,000,000, the ULA tax payable will equal $1,265,000.
*This will calculate on the full gross value of the property, regardless of equity value, existing debts, etc.
**Some qualified organizations will be exempt from this tax.
***This tax only applies to properties located within the City of Los Angeles. It DOES NOT include the other 87 incorporated cities in Los Angeles, such as Burbank, Long Beach, Pasadena, and Santa Monica.
The revenue this new tax will generate will go primarily towards increasing affordable housing and providing resources to tenants at risk of homelessness.
Finally, this new program should generate north of $1B per year.
At the time of this writing, this new tax WILL NOT affect the majority of residential properties here in Playa Vista. To date, only 1 home has ever sold at, or over $5M in the neighborhood. I represented the seller of this property and details can be found HERE.
Meanwhile, should you have any questions, I’d be happy to share more info.