Effective for deeds recorded on or after July 1, 2026, the City of Los Angeles applies a 4 percent transfer tax to property sales above $5,400,000 and a 5.5 percent tax to sales of $10,900,000 or more — on top of the base city and county documentary transfer taxes that were already there. Those thresholds stepped up from $5,300,000 and $10,600,000 a year earlier, and per the Los Angeles Office of Finance they readjust every July 1 against the Bureau of Labor Statistics Chained Consumer Price Index.
If you are negotiating in Brentwood, Encino, Los Feliz, or anywhere else inside city limits at $5 to $6 million, that adjustment shapes your deal more than any other closing-cost line. It is the largest single item sitting on the other side of the table, and it quietly determines what your seller is able to say yes to.
Measure ULA is a City of Los Angeles transfer tax paid by the seller. As of July 1, 2026 it runs 4 percent on sales above $5,400,000 and 5.5 percent on sales of $10,900,000 or more, assessed on the entire price.
What Measure ULA Actually Taxes
Measure ULA — short for United to House LA — was approved by city voters in November 2022 and took effect April 1, 2023. It funds affordable housing production and homelessness prevention, and despite its mansion-tax nickname it reaches all real property inside city limits, including commercial buildings and apartment portfolios.
Two mechanics matter more than the headline rate. The first is that the tax is assessed on the entire consideration rather than on the slice above the threshold, so a $5.5 million sale owes 4 percent of $5.5 million and not 4 percent of the $100,000 overage.
The second is that ULA stacks rather than replaces. The city's base real property transfer tax of $4.50 per $1,000 and the county documentary transfer tax of $1.10 per $1,000 still apply, which puts the combined base at roughly 0.56 percent before ULA enters the picture.
Keep in mind that the exemptions are narrow and aimed at housing policy rather than at price. The Los Angeles Housing Department limits them to qualified affordable housing organizations — 501(c)(3) nonprofits, community land trusts, and limited partnerships or LLCs whose general partner or managing member is a nonprofit with a documented affordable housing record.
The July 1 Adjustment, And Why The Recording Date Matters
The ordinance indexes both thresholds annually, which means the line moves every summer. That single fact makes a great deal of the calculator and flyer material circulating on this subject partially wrong the moment a fiscal year turns over.
Here is the published threshold history, worth reconfirming against the Office of Finance before you lean on it in a negotiation:
| Effective period | 4% tier applies above | 5.5% tier applies at or above |
|---|---|---|
| Apr 1, 2023 – Jun 30, 2024 | $5,000,000 | $10,000,000 |
| Jul 1, 2024 – Jun 30, 2025 | $5,150,000 | $10,300,000 |
| Jul 1, 2025 – Jun 30, 2026 | $5,300,000 | $10,600,000 |
| Jul 1, 2026 – current | $5,400,000 | $10,900,000 |
Note that the governing date is when the deed records, not when the purchase agreement is signed. A contract written in June that records in July falls under the higher threshold, and on a deal sitting within $100,000 of the line that timing is worth six figures to your seller.
The ULA thresholds adjust every July 1 using the Chained CPI. They were $5.0M and $10.0M in 2023, $5.15M and $10.3M in 2024, $5.3M and $10.6M in 2025, and $5.4M and $10.9M from July 1, 2026.
Where ULA Applies, And Where It Does Not
ULA is a municipal tax, so the city boundary is the whole game. Bel-Air, Brentwood, Pacific Palisades, Venice, Cheviot Hills, Hancock Park, Los Feliz, Silver Lake, Encino, Sherman Oaks, and Studio City all sit inside it.
A short drive changes the arithmetic completely. Beverly Hills, West Hollywood, Malibu, Manhattan Beach, and unincorporated county pockets such as Marina del Rey and Ladera Heights fall outside ULA entirely, while Santa Monica and Culver City run their own separate high-value transfer taxes on different thresholds.
| Jurisdiction | High-value transfer tax | Where it starts |
|---|---|---|
| City of Los Angeles | 4% / 5.5% (Measure ULA) | Above $5,400,000 / at $10,900,000 |
| Santa Monica | 5.6% (Measure GS) | $8,000,000 or more |
| Culver City | Tiered, reaching 4% (Measure RE) | Tiers begin near $1,500,000 |
| Beverly Hills | No high-value tier | County documentary transfer tax only |
| Unincorporated LA County | No high-value tier | County documentary transfer tax only |
Two houses of comparable size and finish, one on the Brentwood side of a boundary and one in Beverly Hills, therefore carry very different closing economics for their sellers at identical prices. That difference tells you how much room the seller across the table is working with, even though it never shows up as a discount on your side.
Measure ULA applies only inside City of Los Angeles limits. Beverly Hills, West Hollywood, and unincorporated areas such as Marina del Rey are outside it; Santa Monica and Culver City levy their own separate transfer taxes.
The Brentwood Worked Example: $5.3 Million Versus $5.6 Million
Consider the same Brentwood house, same condition, priced two ways. At $5,300,000 the sale sits below the current $5,400,000 threshold and owes no ULA at all.
At $5,600,000 it clears the line, and 4 percent of the full price comes off the seller's side at recording. Here is the comparison, using the roughly 0.56 percent combined city and county base rate for the non-ULA portion:
Closed at $5,300,000. ULA owed: $0. Base transfer taxes at roughly 0.56 percent: about $29,680. The seller keeps approximately $5,270,320 before commissions and other costs.
Closed at $5,600,000. ULA owed at 4 percent of the full price: $224,000. Base transfer taxes: about $31,360. The seller keeps approximately $5,344,680 before commissions and other costs.
The gap. A $300,000 higher price puts roughly $74,360 more in the seller's pocket, an effective take rate of about 75 percent on that increment.
That is the entire negotiation in three lines. A seller holding out for $5.6 million over $5.3 million is fighting for roughly a quarter of what the price difference appears on its face to be worth.
Turn it around and the buyer's leverage becomes visible. Every dollar you pull the price back toward $5,400,000 costs the seller only about 96 cents of net proceeds, right until the price crosses the line, at which point $224,000 of tax disappears in a single step.
The Dead Zone Above Each Threshold
Because the tax is assessed on the whole sale rather than on the excess, crossing a threshold creates a notch — a band of prices in which a higher contract price produces lower net proceeds. This is the structural reason Los Angeles listings pile up at $5,395,000 and $5,399,000 instead of distributing smoothly across the range.
Run the arithmetic on the 4 percent tier. A seller closing at exactly $5,400,000 nets about $5,369,760 after base transfer taxes, and to beat that number after paying 4 percent ULA the contract price has to reach roughly $5,626,000.
Everything in between is worse for the seller than the threshold price itself. That is a dead zone about $226,000 wide, and a listing sitting inside it is either mispriced or carrying a story the marketing does not tell.
The same shape repeats at the top tier. A seller just under $10,900,000 pays 4 percent, and once the price reaches $10,900,000 the rate jumps to 5.5 percent on the entire amount — so the breakeven lands near $11,074,000, producing a second dead zone roughly $174,000 wide.
Crossing $5,400,000 triggers 4 percent on the whole sale, so a seller nets less at any price between the threshold and about $5,626,000 than at $5,400,000 flat. That band is the ULA dead zone.
What This Means When You Negotiate At $5 To $6 Million
The practical consequence is that price concessions and closing-cost credits stop being interchangeable near the line. Well below the threshold they behave the way they do anywhere else, but at the boundary a price reduction can be dramatically cheaper for the seller than it looks on paper.
If a seller is at $5,575,000 and you are at $5,400,000, the seller is not surrendering $175,000. Once ULA falls away, the seller gives up roughly $121,000 of net proceeds — still real money, and a materially easier conversation than the sticker gap suggests.
Be aware that the same move helps you a second time. Under Proposition 13 your base year value is set by your purchase price, so a lower price permanently lowers the assessment that drives both your annual bill and your California supplemental property tax in year one.
At an effective Los Angeles County rate near 1.2 percent, buying at $5.3 million instead of $5.6 million saves roughly $3,600 in the first year alone, and that base grows by no more than 2 percent annually for as long as you own. Readers weighing how a base year value carries forward across a family transfer will find the mechanics in our guide to California Proposition 19.
You may want to consider carefully before volunteering to absorb the seller's transfer tax by contract. Doing so hands back the single strongest piece of leverage the ordinance gives a buyer in this price band.
The Financing Angle: Appraisal Risk On Thin Comps
Threshold clustering does something to the comparable-sales set that most buyers never see. When listings bunch below $5,400,000 and the band from there up to about $5,626,000 stays sparse, an appraiser working a $5,600,000 contract has fewer genuinely bracketing closed sales to work with.
The result is larger adjustments, wider value ranges, and heavier reviewer scrutiny — which is precisely the condition under which a jumbo appraisal comes in low. That risk is not spread evenly across the price band; it concentrates in the dead zone, exactly where an aggressive seller wants you to buy.
Jumbo underwriting compounds it. Many jumbo investors require a second full appraisal above a stated loan amount and underwrite to the lower of the two, and every lender values the collateral at the lesser of the appraised value or the contract price.
An appraisal that comes in above your price therefore does nothing for you, while one that comes in below it forces cash, a renegotiation, or a dead deal. Confirm your investor's second-appraisal trigger with your loan officer before you write, and see our California mortgage guide for how jumbo overlays vary across the state.
ULA clustering thins the comp set just above $5,400,000, raising low-appraisal risk on jumbo contracts in that band. Lenders value at the lesser of price or appraised value, so a high appraisal never helps you.
Two structural responses are worth knowing about in advance. Buyers who can close with cash and finance afterward sometimes use delayed financing to remove appraisal timing pressure from the offer, and self-employed borrowers whose income documentation slows a jumbo file should look at bank statement loans before they are under contract rather than after.
How Lenders Read Seller Concessions In ULA Territory
There is a clean line between a seller paying costs they legally owe and a seller paying yours. ULA is imposed on the grantor, so in a standard City of Los Angeles contract it is the seller's own closing cost and does not consume your interested-party contribution allowance.
A credit toward your closing costs, your escrow impounds, or a rate buydown is a different instrument entirely. Those are interested-party contributions, and they are capped.
Agency guidelines are the reference frame most underwriters reach for on a primary residence: 3 percent of value above 90 percent LTV, 6 percent between 75.01 and 90 percent, and 9 percent at or below 75 percent. Jumbo loans are not agency loans, however, so the investor's overlay governs, and jumbo overlays frequently cap contributions at 3 percent regardless of LTV.
Two traps show up specifically in ULA deals. The first is a contract that shifts ULA onto the buyer and then has the seller credit it back — that flip converts a seller obligation into an interested-party contribution and can breach the cap outright on a $5.6 million purchase.
The second is a large price cut paired with a large credit. Underwriters read that combination as an inflated contract price propped up by concessions, and it reliably triggers additional appraisal review.
Seller-paid ULA is the seller's own legal obligation, not an interested-party contribution. Closing-cost credits and rate buydowns are, and jumbo investor overlays often cap them at 3 percent regardless of LTV.
What Sellers Try, And What A Buyer Should Watch For
Sellers priced near the line reach for workarounds, and a buyer should recognize them because several carry consequences that land on the buyer's side of the table. Here are the ones that come up most often in the $5 to $6 million band:
- Personal property allocation. Furniture, art, and equipment are carved out of the deed consideration to pull the recorded price under the threshold. Allocations have to be genuine and supportable, and an inflated one is both a tax exposure and an appraisal problem, since the lender will not lend against furniture.
- Off-market and pocket listings. A quiet sale keeps the price out of the public comparable record, which suits the seller and hurts the next buyer's appraisal. Ask your agent what closed nearby that never reached the MLS.
- Seller carryback financing. Deferring part of the price does not defer the tax, because ULA is assessed on total consideration including debt. It also introduces a subordinate lien your jumbo lender has to approve.
- Waiting out the market. Some sellers simply refuse to cross into the dead zone and hold, which is why days-on-market in the band just above each threshold tends to run long. Long marketing time is negotiating information.
- Waiting for the July adjustment. A seller whose price sits barely above the current line may prefer to close after the next indexing moves it. That preference costs you carrying time and rate exposure, so price it before you agree to a long escrow.
None of these change the underlying arithmetic, and all of them are visible if you ask the right question at the right moment. What they signal, consistently, is a seller who already understands the notch — which means the negotiation is about splitting a known number rather than discovering one.
One More Variable On The 2026 Calendar
The Howard Jarvis Taxpayers Association's Local Taxpayer Protection Act has qualified for California's November 2026 statewide ballot. As CalMatters has reported, it would cap local real estate transfer taxes at one-twentieth of one percent and raise the approval threshold for voter-initiated local taxes to two-thirds.
Measure ULA is the most prominent tax it would reach. Separately, the Los Angeles City Council floated exemptions for newly constructed multifamily buildings and for Pacific Palisades owners selling after the January 2025 fire, and neither has been adopted — as of this writing, no such exemption is law.
This publication does not predict election outcomes or advise on timing a purchase around one. What is worth doing is asking your real estate attorney how your contract allocates a change in transfer tax law between signing and recording, because that clause is usually silent and the dollar amounts here are large.
A Short Checklist Before You Write The Offer
Most of the value in understanding ULA shows up in the hour before you submit an offer rather than afterward. Run through the following:
- Confirm the jurisdiction. Verify the property sits inside City of Los Angeles limits rather than in an unincorporated pocket or an adjacent city, because the answer moves the seller's economics by six figures.
- Confirm the live threshold. Pull the current figures from the Office of Finance rather than from a listing flyer, and check them against your expected recording date rather than your offer date.
- Locate your price relative to the notch. If the asking price sits between $5,400,000 and roughly $5,626,000, the seller is already netting less than they would at the threshold, and that is worth naming in writing.
- Separate price from credits. Decide with your loan officer which portion of your ask should be a price reduction and which should be a credit before anything goes out.
- Stress-test the appraisal. Ask your agent for closed bracketing sales above and below your price, and ask your lender whether a second appraisal is triggered at your loan amount.
- Price the carrying costs. High-value California homes in brush-adjacent areas increasingly depend on the California FAIR Plan for coverage, and your lender will require a bound policy before funding.
Buyers weighing a financed offer against a cash strategy in this band should also read how sellers actually evaluate those terms in our breakdown of all-cash offers. Sellers considering a like-kind exchange should note that a 1031 exchange defers capital gains but does nothing about ULA, which is owed at recording regardless of how the proceeds are reinvested.
The Bigger Pattern
Los Angeles is not alone in taxing transfers at the closing table, and the mechanics rhyme from city to city. Buyers who have navigated the Chicago transfer tax or the tiered structure behind the Howard County transfer tax will recognize the same three elements: a locally set rate, a threshold that distorts pricing around it, and a split of responsibility that is negotiable more often than either side admits.
What makes ULA distinctive is scale. A 4 percent levy on the full price of a six-million-dollar house is a larger number than most buyers have ever negotiated over, and it sits on the table whether or not anyone at the table names it.
If you are shopping the $5 to $6 million band inside city limits, start by mapping where your target price falls relative to the current threshold, then work backward to an offer structure and a financing plan that both survive the appraisal. Our affordability map is a reasonable place to begin comparing how transaction costs stack up across California markets.
This article is for informational purposes and is not financial, mortgage, tax, legal, or contractor advice. Thresholds and rates change annually; verify current figures with the Los Angeles Office of Finance and consult a licensed professional in your jurisdiction.