After some considerable analysis, we have evaluated an option for avoiding the ULA tax (also known as the "Mansion Tax") until December 2024, which is one month after the initiative to void the tax will be on the ballot.
In the November 8, 2022, election, voters in the City of Los Angeles savaged the value of so-called “expensive” residential and commercial real estate by adopting Measure ULA (“ULA”).
The “Mansion Tax,” which became effective April 1, 2023, imposes additional transfer taxes on the sale of residential and commercial properties in Los Angeles.
Previously, the combined city and county transfer tax was $5.60 per $1,000 of valuation. ULA boosts that by adding 4% of the total consideration (there is no credit for existing debt) for sales of $5,000,000 or more, up to $10,000,000, and 5.5% of the total consideration for sales of $10,000,000 or more.
Technically, the ULA tax is only due when a deed conveying title is recorded in the Los Angeles County Recorder's Office.
Under our proposed concept, no deed would be recorded until December 2024. This would provide the seller with certainty that no Mansion Tax will be due until that time. In the meantime, the seller will have the benefit of getting the sales proceeds now.
If the initiative passes, there will never be a Mansion Tax due. If the initiative does not pass, the Mansion Tax will be due when title is conveyed in December 2024.
This is an ideal solution for sellers who want to get what would otherwise be the full amount of the sales proceeds now, and defer paying any Mansion Tax (if it is upheld) for 18 months.
If you are interested in learning more, send me an e-mail at This email address is being protected from spambots. You need JavaScript enabled to view it., or call me at (310) 601-7010.
By Robert Weiss