What is Measure ULA?
Measure ULA, often called the "mansion tax," was introduced in Los Angeles to address the city's homelessness crisis by taxing high-value real estate transactions. Enacted on April 1, 2023, Measure ULA imposed an additional tax: sellers of properties valued between $5 million and $10 million were required to pay a 4% tax to the city, while sellers of properties valued at $10 million or more were required to pay 5.5%.
As the Measure marked its first anniversary at the start of Q2 2024, it had not met expectations. According to the Los Angeles city controller's office, Measure ULA brought in just $173.6 million by the end of Q1 2024, about a quarter of the city's estimates. Voters were initially told the tax would generate anywhere from $672 million to almost $1 billion annually.
Upcoming Threshold Changes
As of June 30, 2024, new thresholds for taxable transactions under Measure ULA have been established:
Properties valued between $5,150,000 and $10,300,000 will incur a 4% tax.
Properties valued at $10,300,000 and above will incur a 5.5% tax.
This adjustment marks a 3% increase from the initial thresholds of $5,000,000 and $10,000,000, respectively.
Moving Forward
As the Los Angeles real estate community navigates the effects of Measure ULA, it's crucial to understand its broader impacts and the upcoming reassessment opportunity. Measure ULA, intended to tax high-value transactions to fund homelessness prevention, has affected the entire market, including luxury home sales and new developments. This has led to decreased marketability of high-end properties, discouraged new housing projects, and created market uncertainty. Recognizing these issues, efforts are underway to revisit and refine the Measure.
The revote on Measure ULA, officially called the Measure ULA Reassessment, is set for November 5, 2024. To reverse or amend Measure ULA, a majority vote from Los Angeles residents is required. It's essential for voters to participate and voice their opinions. By staying informed and engaged, the community can help create a balanced solution that addresses housing needs without stifling investment and development in the city.
Get in Touch
Do you have any more questions about Measure ULA? Are you anticipating a move soon? Whether buying or selling, you deserve the highest level of service for a smooth and stress-free experience. Give me a call!
