Thinking about selling a high‑value home on the Westside and wondering how Los Angeles’ “mansion tax” might affect your net proceeds? If you own in Pacific Palisades, Brentwood, or Bel Air, Measure ULA can be a factor, but only for properties inside Los Angeles city limits. A little preparation goes a long way in protecting your bottom line and avoiding surprises at escrow. In this guide, you will learn what Measure ULA is, who it applies to, how it interacts with the County tax, what exemptions to explore, and the practical steps to take before you list. Let’s dive in.
What Measure ULA means
Measure ULA changed how the City of Los Angeles applies its real property documentary transfer tax on certain higher‑value transfers. It is a City tax that can apply in addition to the standard County documentary transfer tax collected on most real estate sales. For Westside luxury sellers, the key is determining whether your sale crosses the City’s triggering thresholds and how the tax is calculated at closing.
Measure ULA was adopted by voters and implemented through the Los Angeles Municipal Code and administrative guidance. The most reliable details live in the City’s ordinance and the City department that collects the tax. Because amendments and guidance evolve, you should verify the current rules and rate schedule before you sign a listing agreement.
City vs. County tax
If your property is inside the City of Los Angeles, a sale typically triggers two separate transfer taxes at recording: a City tax and a Los Angeles County documentary transfer tax. Measure ULA only changes the City portion. The total your escrow will collect is the combined City plus County amount.
If your property is outside City limits, only the County documentary transfer tax usually applies. This is why confirming your parcel’s municipal boundary is one of the first steps in your planning.
Are you inside LA City?
Pacific Palisades, Brentwood, and Bel Air include areas inside and outside the City of Los Angeles. Street names and mailing addresses can be misleading, so do not assume. Parcel location determines tax treatment.
Here is how to confirm:
- Ask your title or escrow officer to verify City boundaries for your parcel during pre‑listing diligence.
- Check official parcel maps or the County assessor parcel viewer for municipal boundaries.
- Confirm again when you open escrow, since escrow will rely on that determination when computing taxes.
What transfers are covered
Measure ULA and the City’s documentary transfer tax generally apply to the recording of deeds that transfer real property interests. For high‑value Westside transactions, that commonly includes:
- Sales of single‑family residences, condominiums, and townhomes.
- Transfers of vacant residential land or build sites.
- Some transfers of interests in entities that own real property, if they result in a change in ownership under the City’s rules.
Certain gifts, trust transfers, and corporate reorganizations may be excluded, but those outcomes depend on definitions in the ordinance and the documentation you record at closing. Because entity transfers and intra‑family moves can have complex tax effects, you should involve a tax attorney and CPA early.
Rates, thresholds, timing
Measure ULA establishes citywide thresholds and rates that apply when a sale price crosses the City’s defined levels. The implementation details matter, including whether a higher rate applies to the entire price once you cross a threshold or only to the portion above it. Effective dates and any grandfathering rules also come from the ordinance and administrative guidance.
Because these numbers can change by City action, do this before you go to market:
- Confirm the current City rate schedule and thresholds with the latest ordinance and the City’s tax collection department.
- Ask escrow for a written estimate that shows the combined City plus County transfer taxes at several price outcomes.
- If you have an older purchase contract or a long escrow, verify whether transitional rules or effective dates could apply.
Exemptions to explore
The City’s code and guidance outline exemptions and exclusions that may remove a transfer from the tax or change how it is applied. Common categories to ask about include:
- Inter‑spousal transfers.
- Transfers to or from certain revocable trusts, or transfers that do not change beneficial ownership.
- Transfers ordered by a court or related to foreclosure.
- Transfers to government entities or qualifying charitable organizations.
Exemptions are not automatic. Most require specific claim forms and supporting documents that must be recorded with the deed. If you miss the timing, you may need to pursue a post‑closing refund or appeal. Coordinate with escrow and your attorney early so the right affidavits are prepared and reviewed before recording.
How escrow handles it
City and County transfer taxes are typically collected at recording. In practice, your escrow officer calculates the tax based on the final purchase price and instructions in the contract. The funds are collected from the parties and remitted when the deed is recorded.
Who pays is a negotiable term in Los Angeles. In many high‑value sales, the allocation is discussed up front and reflected in the offer, counter, and escrow instructions. Ask your agent to model net proceeds under multiple scenarios so you know how an allocation decision impacts your bottom line.
Planning moves that matter
Thoughtful pre‑sale planning can help you avoid avoidable taxes, manage cash flow, and reduce audit risk. Consider these steps several months before listing:
- Map ownership and structure. If the property sits in a trust, LLC, or corporation, understand how a sale or interest transfer would be treated under the City rules.
- Coordinate with estate planning. Parent‑child transfers and other intra‑family moves interact with Proposition 13 reassessment rules and Proposition 19’s changes. Evaluate both transfer tax and property tax outcomes.
- Model federal and state income tax. Transfer taxes are separate from capital gains and state income taxes. A CPA can help you forecast net proceeds.
- Evaluate 1031 exchanges and installment sales. A 1031 can defer capital gains on qualifying real property, but it does not usually eliminate City or County transfer taxes. Installment structures can smooth income tax timing, though transfer tax is still addressed at recording.
- Consider philanthropic strategies. Charitable remainder trusts or bargained gifts have specific tax and legal implications that require specialist counsel.
If you are contemplating ownership restructuring to change how a sale is taxed, proceed carefully. Transactions designed to avoid transfer tax may draw scrutiny. Keep your advisers aligned and document business purpose.
Pricing and contract tips
How you structure price and terms can influence your net. Align with your agent on the following:
- Price strategy. Some sellers choose to “gross up” list price to account for a negotiated tax allocation. Make sure the strategy aligns with comparables and buyer demand.
- Clear allocation in writing. Specify who pays the City and County transfer taxes in the purchase agreement and escrow instructions.
- Credits and adjustments. Spell out any credits or offsets, and confirm how they interact with the tax base used at recording.
Small contract details can change your proceeds. A disciplined, numbers‑first approach will help you choose terms that reflect both market conditions and tax reality.
Seller checklist
Use this short list as you prepare to sell in Pacific Palisades, Brentwood, or Bel Air:
- Confirm your parcel is inside the City of Los Angeles.
- Obtain the current City of Los Angeles transfer tax schedule and administrative guidance for Measure ULA.
- Ask title and escrow for a combined City plus County transfer tax estimate at likely price points.
- Engage a CPA and real estate attorney early to review structure, exemptions, and timing.
- Ensure the purchase agreement allocates City and County taxes explicitly, with any gross‑up or credits reflected in escrow instructions.
- Gather documentation for any exemption claim you plan to assert at recording.
A practical scenario
Imagine a Pacific Palisades home that will likely attract multiple offers at the top of the neighborhood’s range. You confirm the parcel is inside City limits, and your team pulls the current City thresholds and rates. Escrow models the combined City and County transfer taxes at three potential contract prices, and your CPA evaluates net proceeds alongside capital gains projections.
You and your agent decide to price with transparency and negotiate a clear allocation of transfer taxes in the offer and counter process. You also prepare trust documents and any required affidavits for recording in case an exemption applies. By doing this work before launch, you avoid last‑minute delays and keep your closing on schedule.
Final thoughts
Measure ULA adds a layer of complexity to high‑value sales inside the City of Los Angeles, especially on the Westside where neighborhood boundaries are nuanced. With the right plan, you can anticipate costs, preserve negotiating leverage, and move through escrow with confidence. If you want a confidential, data‑driven read on how Measure ULA could affect your specific property, connect with Derrick Smith for a private consultation.
FAQs
What is Measure ULA for Los Angeles home sales?
- Measure ULA is a City of Los Angeles real property transfer tax framework that applies to certain higher‑value transfers inside City limits and is collected at recording in addition to the County documentary transfer tax.
Does Measure ULA apply to Pacific Palisades properties?
- It applies only if the parcel is inside the City of Los Angeles, so you should verify municipal boundaries with title, escrow, or official parcel maps since parts of Pacific Palisades sit outside City limits.
Who pays transfer taxes in LA City sales?
- Payment is typically negotiated between buyer and seller, so your purchase agreement and escrow instructions should explicitly allocate both the City and County transfer taxes.
Are spouse or trust transfers exempt from Measure ULA?
- Some inter‑spousal and certain trust‑related transfers may be excluded, but you must meet the ordinance definitions and record the required documentation to claim an exemption.
Do 1031 exchanges eliminate City and County transfer taxes?
- No, a 1031 exchange can defer capital gains taxes on qualifying real property, but City and County documentary transfer taxes are generally still addressed at recording.
When should I start planning for a Measure ULA exposure?
- Start several months before listing so your attorney, CPA, and agent can align on structure, exemptions, pricing, and escrow documentation without last‑minute delays.
