Changes to the Los Angeles Mansion Tax and Measure ULA

Los Angeles’ famed “Mansion Tax” was a misnomer from the beginning. The city’s property transfer tax, officially known as the ULA Tax, was introduced as part of Measure ULA to fund affordable housing programs and provide resources to tenants at risk of homelessness. But what most voters failed to recognize in November 2022, when Measure ULA was billed as a tax on luxury home sales, is that its provisions apply broadly to residential and commercial properties above a certain value threshold. The so-called Mansion Tax was never just about mansions.

 

Updated ULA Tax Thresholds

Following its first year in effect, the ULA Tax adjusted its thresholds to account for inflation. As of mid-2024, transactions above approximately $5.3 million are subject to a 4% transfer tax, while transactions above $10.6 million are assessed a 5% tax. These updated thresholds represent modest increases from the original $5 million and $10 million benchmarks, but continue to capture a wide swath of commercial and multifamily transactions across Los Angeles.

 

One Year Later: Revenue vs. Market Impact

While Measure ULA was originally projected to generate between $672 million and $1 billion annually, early collections fell well short of expectations. Initial reports showed revenue lagging significantly during its first year, coinciding with a sharp slowdown in transaction volume as owners accelerated sales ahead of implementation and buyers adjusted underwriting assumptions post-launch.

 

More recent data paints a mixed picture. According to LA Business First, Measure ULA has now generated approximately $1 billion across more than 1,400 transactions since taking effect. Supporters argue the tax has become a meaningful funding source for housing initiatives, calling it an “economic engine” for the city.

 

However, opponents continue to point to structural distortions in the market. Research cited by CalMatters from UCLA and the RAND Institute estimates the policy has resulted in 1,900 fewer apartment units delivered annually, including a reduction in affordable housing production. A separate study by Harvard, UC Irvine, and UC San Diego researchers found that the slowdown in sales significantly reduced property tax collections, offsetting an estimated 63% of the transfer tax revenue generated by Measure ULA.

 

New Developments: Amendments May Head to the Ballot

In a notable shift, the Los Angeles City Council has voted to advance proposed amendments to Measure ULA for further review by the city’s Housing and Homelessness Committee. The proposal, introduced by Councilmember Nithya Raman, includes a 15-year exemption from the ULA Tax for new commercial, multifamily, and mixed-use construction, tied to the issuance of a certificate of occupancy.

 

“The proposed 15-year exemption tied to a project’s certificate of occupancy could give developers the certainty needed to move forward on multifamily and mixed-use projects, helping bring much-needed housing supply back online in Los Angeles.”

– Adam Feldman

 

Additional elements of the proposal include a one-time exemption for Palisades fire victims and technical changes intended to accelerate the deployment of collected funds. While an attempt to fast-track the amendments to a near-term ballot failed, the stated goal is to place the revised measure before voters in November 2026.

 

Industry groups, including NAIOP SoCal, have noted that a development-focused exemption could materially reduce ULA exposure on qualifying projects, restore financing certainty, and unlock reinvestment that has stalled under the current structure.

 

Current Listings Exposure Under Measure ULA

Despite ongoing debate around amendments, Measure ULA continues to affect a significant share of active inventory across Los Angeles. According to CoStar, at the start of 2026, more than 1,000 active listings fall within or near the current ULA tax thresholds, underscoring the policy’s broad reach across commercial and residential assets:

• $5,000,000–$5,150,000 value: 53 properties
• $10,000,000–$10,300,000 value: 31 properties
• $5,150,000–$10,300,000 value: 800 properties
• $10,300,000+ value: 492 properties

 

Outlook for the Mansion Tax

Compared to the pre-implementation rush to sell in 2023, today’s environment is defined by hesitation. Owners and buyers remain cautious, particularly when transaction values fall near ULA thresholds. While proposed amendments signal growing acknowledgment of the tax’s unintended consequences, uncertainty will likely persist until voters weigh in.

 

Until then, investors should expect continued friction in transaction activity, heightened sensitivity around pricing and timing, and ongoing headwinds for commercial and multifamily development in Los Angeles, even as the policy’s long-term future remains in flux.