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1. Home 2. Faq 3. Real Residential Or Commercial Property Transfer Tax And Measure ULA FAQ

Real Residential Or Commercial Property Transfer Tax and Measure ULA FAQ

Prices Calculate tax

Tax Due

Effective for deals closing after June 30, 2025, the brand-new limits 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 frequently 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 files that communicate real residential or commercial property within the City, unlike residential or commercial property taxes which happen every year. The genuine residential or commercial property transfer tax is an excise tax on the privilege of selling a genuine residential or commercial property interest, not a tax on the residential or commercial property itself, and is computed on the consideration or worth of the genuine residential or commercial property interest conveyed.

Does the City impose a genuine residential or commercial property transfer tax aside from the unique tax imposed under Measure ULA?

Yes, the City imposes a real residential or commercial property transfer tax on all documents that convey genuine residential or commercial property within the City. Today tax (" Base Tax") is computed based upon the factor to consider or worth of the real residential or commercial property interest communicated at a rate of 0.45%. The special tax under Measure ULA (" ULA Tax") imposes an extra tax on top of the Base Tax.

What is Measure ULA and how does it work?

Measure ULA established the ULA Tax to fund affordable housing jobs and supply resources to tenants at danger of homelessness. The ULA Tax is imposed on all files that communicate real residential or commercial property within the City of Los Angeles when the consideration or worth of the genuine residential or commercial property interest conveyed surpasses a threshold of five million dollars, or is 10 million dollars or greater, respectively.

What are the rate parts of the Base Tax and the ULA Tax under the City's real residential or commercial property transfer tax?

The rate elements are as follows:
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- 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 communicated 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 value of the residential or commercial property conveyed is not divisible by $500 will be up to the closest $500 for the computation of the Base Tax. This does not use to the ULA Rate estimations, which are percentage-based.
  
  When did the ULA Tax go into effect?
  
  The ULA Tax is relevant to certified conveyances of real residential or commercial property interests that take place on or after April 1, 2023.
  
  How will the City use the April 1 efficient date of the ULA Tax?
  
  The City's procedure for using the ULA Tax is modeled on the ownership change guidelines under California Board of Equalization residential or commercial property tax guideline 462.260 for all files subject to the City's real residential or commercial property transfer tax. If a modification of ownership took place before April 1 however is received by the county for taping on or after April 1, 2023, the taxpayer will require to offer evidence of the actual deal date to reveal that it actually happened before the April 1, 2023 reliable date of the ULA Tax.
  
  Will the value thresholds under the ULA Tax be adjusted every year?
  
  Consistent with the Measure ULA, the value thresholds of when to use the ULA Tax and its corresponding rates are adjusted every year based upon the Bureau of Labor Statistics Chained Consumer Price Index.
  
  How will the City's genuine residential or commercial property transfer tax be used to residential or commercial properties that are located partly within the limits of the City?
  
  The genuine residential or commercial property transfer tax will be applied in proportion to the value of the genuine residential or commercial property interest that was moved within the boundaries of the City. If an evaluation of the real residential or commercial property interest isn't readily available, the genuine residential or commercial property transfer tax should be applied based on the square video of the residential or commercial property within the limits of the City, as a percentage of the overall factor to consider or worth of the genuine residential or commercial property interest communicated.
  
  How will the City handle over payments or under payments of the real residential or commercial property transfer tax?
  
  If the City, through its compliance procedure, recognizes a potential over payment or under payment, the City will inform the parties to the transaction of the possible overpayment or underpayment. In cases of overpayment, taxpayers will require to submit an ask 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 an invoice for the unsettled balance.
  
  Exist any exemptions for the ULA Tax?
  
  Yes, Measure ULA does supply exemptions for the ULA Tax. The ULA Tax will be not apply on files that convey real residential or commercial property within the City of Los Angeles if the transferee is explained under newly added sections 21.9.14 and 21.9.15 of the Los Angeles Municipal Code (" LAMC"). The transferee descriptions are as follows:
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  Qualified Affordable Housing Organizations under LAMC Section 21.9.14
  
  - A non-profit entity within Internal Revenue Code area 501( c)( 3) with a history of inexpensive housing advancement and/or cost effective housing residential or commercial property management experience.
  - A Community Land Trust, or Limited-Equity Housing Cooperative that has a history of economical housing development and/or affordable housing residential or commercial property management experience.
  - A restricted collaboration or limited liability business where a recognized 501( c)( 3) nonprofit corporation, neighborhood land trust, or limited-equity housing cooperative is a general partner or handling member and such 501( c)( 3) not-for-profit corporation, neighborhood land trust, or limited-equity housing cooperative has a history of affordable housing development and/or economical housing residential or commercial property management experience, or such limited partnership or restricted liability business includes a partner or member, respectively, that has a history of inexpensive housing development and/or budget friendly housing residential or commercial property management experience.
  - A community land trust or limited-equity housing cooperative partnering with an experienced non-profit organization.
  - A community land trust or limited-equity housing cooperative that does not demonstrate a history of cost effective housing advancement and/ or cost effective housing residential or commercial property management experience which records an affordability covenant, constant with section 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

- An acknowledged 501( c)( 3) entity which got its initial IRS determination letter classification letter at least ten years prior to the transaction and has properties of less than $1 billion.
- The United States or any agency or instrumentality thereof, any state or area, or political neighborhood thereof, or any other federal, state or local public firm or public entity.
- Any entity or company exempt from the City's tax power under the California or U.S. Constitutions.
- All other transactions which are exempt from the base Real Residential or commercial property Transfer Tax per regional, state, or federal laws and policies.
The Office of Finance administers ask for ULA tax exemptions under LAMC Section 21.9.15. To request a decision of an entity's exemption from the ULA under 21.9.15( a), please send the following documents and info to finance.ula@lacity.org.

- Power of Attorney.
- Legal name.
- Mailing address.
- IRS 501 (c)( 3) determination letter showing the efficient date of the exemption status.
- Latest Form 990 or latest audited financial statements.
Once the appropriate documentation has actually been supplied and a decision of exemption has been made, the Office of Finance will provide a letter certifying that transactions 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 taken place and the tax was paid, however the purchaser consequently believes it receives an exemption, they will need to file a refund claim utilizing the form kept in mind above.

Is the same step utilized to determine the Base Tax and the ULA Tax?

For the Base Tax, it is calculated based upon net value of the residential or commercial property conveyed (exclusive of the worth of any lien or encumbrance remaining thereon at the time of sale.) For the ULA Tax, it is determined based on gross value (including the worth of any lien or encumbrance staying thereon at the time of sale.)

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

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

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

Office of Finance

Office of Finance Special Desk Unit 200 North Spring Street, Room 101 Los Angeles, CA 90012

Client Service Center (844) 663-4411 Phone Hours: Monday, Tuesday, Wednesday and Thursday: 9:00 a.m. - 3:00 p.m. Friday: 9:00 a.m. - 2:00 p.m.

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