Los Angeles Measure ULA Tax: A Seller’s Guide

Selling property in Los Angeles and hearing about Measure ULA? You are not alone. Many sellers, trustees, and investors want to understand if this transfer tax applies to their sale and how it might affect net proceeds. In this guide, you will learn what Measure ULA is, when it typically applies, common exemptions to check, and practical steps to plan your sale with confidence. Let’s dive in.

Measure ULA in plain English

Measure ULA is a City of Los Angeles real property transfer tax. It applies to qualifying transfers of real estate located within city limits. The measure sets rates based on value thresholds and outlines who pays, how the tax is collected, and which transfers may be exempt.

City ballot measures and ordinances can be updated after passage. Always verify the current rate schedule, thresholds, and exemptions before you list. The standard places to confirm are the City Clerk’s ballot text and ordinances, the city office that administers transfer taxes, the Los Angeles County recording offices, and your title and escrow team.

Who it affects

• Homeowners selling property inside the City of Los Angeles.
• High-value sellers whose sale price may cross a ULA threshold.
• Trustees, executors, and conservators handling probate or trust sales.
• Investors and developers selling multi-unit or mixed-use properties.
• Buyers and sellers negotiating who pays transfer taxes in the contract.

How it typically works

• Taxable event: A transfer of real property interests within the city, usually triggered at recording.
• Tax base: Usually the consideration paid or the value transferred. Some rules include assumed liabilities.
• Collection: Title and escrow typically calculate and collect at closing when documents are recorded.
• Who pays: Local custom often places payment on the seller, but the purchase agreement can allocate costs differently.

Because the ordinance controls the fine print, verify whether the tax applies based on recording date, transfer date, or another event. This detail can affect timing decisions and contract language.

Common exemptions to check

Every transfer tax regime lists specific exemptions. Confirm what the current ordinance allows. Common categories to review include:

• Transfers between spouses or registered domestic partners.
• Certain transfers between parent and child.
• Transfers that occur by operation of law, including foreclosure or deed in lieu.
• Transfers to or from governmental entities or qualifying nonprofits.
• Transfers due to death, such as probate distributions or trust transfers to beneficiaries.
• Affordable housing program transactions, where applicable.

Exemptions are never one-size-fits-all. Ask escrow what documentation they will require to establish and process any exemption.

Key planning steps for LA sellers

• Confirm your property’s location is inside City of Los Angeles limits and not just within Los Angeles County.
• Obtain a written transfer tax estimate from your title or escrow officer based on your likely list price and expected sale price.
• Decide who will pay transfer taxes and include clear contract language. Make this part of your initial negotiation strategy.
• Review pricing strategy with your agent to account for transfer taxes and other closing costs so your net meets your goals.
• Clarify whether the tax is triggered by recording date or another milestone to avoid timing surprises.

Timing and contract strategy

• Coordinate your target closing date with any effective dates or rate changes. If timing is close, your escrow officer can advise how recording calendars work.
• Add explicit language to the purchase agreement that assigns responsibility for transfer taxes. Keep it clear so there are no last-minute disputes.
• Consider a clause that addresses changes in law between contract and closing. Your attorney can draft language that fits your situation.

Estate and trust considerations

• Executors and trustees should confirm whether a transfer from an estate or trust is exempt. If not, plan for liquidity at closing to cover the tax.
• If a trust transfer to a beneficiary is planned, verify whether that transfer is taxable or exempt. The answer can change the timing of distributions.
• Coordinate early with probate counsel, your CPA, and escrow to gather any exemption documents and avoid recording delays.

Hypothetical scenarios to illustrate impact

The following scenarios are examples only. They use placeholder rates to show how calculations work. Replace these with the current official rates when planning your sale.

Scenario 1: Single-family sale below a threshold

• Hypothetical facts: Sale price is 3,000,000. Assume a hypothetical base rate applies because the price is below a ULA threshold.
• Hypothetical result: Transfer tax equals the base rate multiplied by the sale price.
• Takeaway: Even a base-rate tax can be meaningful. Get a written estimate from escrow so you can price and negotiate with clarity.

Scenario 2: High-end sale where surtax applies

• Hypothetical facts: Sale price is 15,000,000. Assume progressive rates apply, with higher percentages above certain thresholds.
• Hypothetical result: Calculate the tax marginally across brackets, then sum the totals for a combined amount.
• Takeaway: At higher prices, transfer taxes can materially affect net proceeds. Model scenarios at multiple price points before you finalize strategy.

Scenario 3: Estate transfer near an effective date

• Hypothetical facts: An estate plans a transfer in six months. A new rate is scheduled to take effect next month and applies based on recording date.
• Considerations: If the transfer occurs after the new effective date and is not exempt, the estate may need cash at closing to pay the tax. Adjust timing or distributions accordingly.

How title and escrow handle it

• Calculation: Your escrow officer will calculate city and county transfer taxes based on the final sale price and the current ordinance.
• Documentation: If you claim an exemption, escrow will request supporting documents and will not apply an exemption without them.
• Collection: Taxes are typically collected on the closing statement and remitted at recording.
• Disclosure: The transfer tax line items appear on your closing disclosure or settlement statement for full transparency.

Questions to ask early in escrow

• Do you have a current written estimate for Measure ULA and county documentary transfer taxes based on our price range?
• What documents are required to establish any exemptions that may apply to this transfer?
• Which date triggers the tax for our file and how does the recording calendar affect that timing?
• How will the transfer taxes appear on the closing disclosure and who is listed as the payor?

Tips for pricing and negotiation

• Price with the end in mind. Work backward from your target net after accounting for transfer taxes and other costs.
• Be upfront about allocation. Address who pays transfer taxes in your counteroffer, not at the last minute.
• Keep buyers engaged. If buyers resist higher list prices, consider alternative concessions that do not affect the recording calculation.
• Monitor appraisals and financing. A price increase that only covers taxes could still impact loan-to-value and appraisal outcomes.

What to verify before you list

• The current rate schedule and thresholds in the City of Los Angeles ordinance.
• Whether the measure applies to residential, commercial, or all real property.
• The definition of consideration, including any assumed liabilities.
• The effective date and whether recording date controls the trigger.
• The full interplay between city and county taxes on your transaction.

Work with a local advisor

Measure ULA can affect your proceeds, timing, and contract strategy. The right partner will help you confirm the rules, secure accurate estimates, and position your sale for a smooth close. If you are a homeowner, executor, or investor in South or Central Los Angeles, our team can help you plan the path forward.

Ready to talk through your sale plan and get a clear estimate? Connect with Keyholder Estates for steady, experienced guidance.

FAQs

What is Measure ULA in Los Angeles?

• It is a city-level real property transfer tax that applies to qualifying transfers of property located within Los Angeles city limits, with details set by ordinance.

When does Measure ULA apply to a sale?

• It typically applies at the time of recording for taxable transfers inside the city, but you should verify the exact trigger and effective dates for your transaction.

Who pays the Measure ULA tax at closing?

• Local custom often assigns transfer taxes to the seller, but the purchase agreement can allocate responsibility, and escrow will follow the contract and ordinance.

Are trust or probate transfers exempt from Measure ULA?

• Some transfers related to death or trusts may be exempt while others are taxable, so you must check the current exemption list and provide documents to escrow.

Does Measure ULA apply to commercial and residential property?

• Many municipal transfer taxes apply to all real property unless limited by the ordinance, so verify whether your property type is covered under current rules.

How do I estimate my Measure ULA tax?

• Ask your title or escrow officer for a written estimate based on the expected sale price and the latest rate schedule, including any city and county transfer taxes.