Measure ULA Now Starts at $5.4M: What LA Owners Should Know

Plenty of Los Angeles business owners hold their most valuable asset on the balance sheet as a building: the warehouse a family distribution company bought decades ago, the restaurant's corner lot, the small creative office a founder purchased instead of leasing. If a sale, a sale-leaseback or a partner buyout is on your 2027 horizon, the city's Measure ULA transfer tax belongs in the plan from the first conversation, not the last week of escrow.

This article is general information, not legal or tax advice. Confirm every number with your escrow officer, attorney or tax professional before you price a deal.

The numbers changed on July 1

The City of Los Angeles charges a base real property transfer tax of $2.25 per $500 of value, or 0.45%, on every sale. Measure ULA adds a second layer on higher-value deals. For transactions closing after June 30, 2026, the Office of Finance lists these thresholds:

• 4% on transfers above $5.4 million and below $10.9 million
• 5.5% on transfers of $10.9 million or more

Those thresholds were $5.3 million and $10.6 million in the prior year. The city adjusts them annually using the Chained Consumer Price Index, so a figure you saw in a broker's deck last spring may already be stale. The county's own documentary transfer tax schedule shows both the 2025 and 2026 figures side by side.

Why a single dollar matters

The ULA tax is not marginal. It applies to the full value of the transfer, not just the amount above the threshold. As the LA real estate blog Brick Work points out, a sale at exactly $5,400,000 owes no ULA tax, while a sale at $5,400,001 owes 4% of the whole price, roughly $216,000.

That cliff shapes negotiations. Buyers and sellers near the line sometimes look at pricing at or just under the threshold, or at separating items that are not real property. Any such move needs to reflect genuine value and be reviewed by professionals; splitting a deal artificially is the kind of thing that invites scrutiny.

The same analysis flags another trap: the base tax is calculated on value net of liens that remain on the property, while the ULA tax is calculated on gross value, including debt a buyer assumes. A deal structured around a loan assumption can cross the ULA line even when far less cash changes hands.

Check which city you are actually in

Measure ULA applies only within the City of Los Angeles. That sounds obvious until you remember how many LA-area addresses sit in other cities or unincorporated county land. Neighboring cities run their own rules, and some are steep. The county schedule lists Culver City at 4% on amounts of $10 million and above, with lower tiers starting at $1.5 million, and Santa Monica at $56 per $1,000 on amounts of $8 million and above. Pull the parcel's jurisdiction before you model anything.

Exemptions are narrow

Most ordinary sellers will not qualify for an exemption. The city's ULA exemptions FAQ focuses on who the buyer is, covering categories such as qualifying affordable housing nonprofits, community land trusts and government entities. If your buyer happens to be one of those organizations, it is worth asking early whether the transfer could qualify, since the paperwork takes time.

What happened with reform this year

• No local ballot fix. On July 1, the City Council voted to shelve a proposed November ballot measure that would have exempted new multifamily construction, Bisnow reported. The council did approve a one-time, five-year exemption for Palisades fire survivors and a credit program that can lower the ULA rate to 1.5% for residential projects with some affordable housing that use prevailing wage labor.
• The statewide initiative changed. The Howard Jarvis Taxpayers Association withdrew its original measure, which would have capped transfer taxes and could have invalidated ULA. According to BOMA Greater Los Angeles, the replacement on the November ballot, Proposition 43, would require two-thirds voter approval for future citizen-initiative special taxes beginning in 2027, but it does not repeal, reduce or change Measure ULA.

In short, for a sale in the City of Los Angeles in 2027, plan on ULA applying as written.

A planning checklist for owner-operators

These are our suggestions for conversations with your advisors:

1. Confirm the jurisdiction of the parcel and the current thresholds on the Office of Finance page.
2. Get a realistic valuation. Know whether the likely price lands near $5.4 million or $10.9 million before you list.
3. Model the full closing cost, including the base city tax, the county documentary transfer tax, ULA if it applies, and broker and escrow fees.
4. Review structure with counsel, especially loan assumptions, partner buyouts and any transfer of an entity that owns real estate.
5. Compare alternatives. For some owners, a long-term lease to a new operator or a refinance may meet the same goal as a sale. Run the numbers on each.
6. Watch the calendar. Thresholds adjust each July, so a closing date on either side of June 30 can change the math.

Transfer taxes are rarely the reason to sell or hold, but at these rates they can move net proceeds by hundreds of thousands of dollars.