Measure ULA, explained.
Voter-approved November 2022, effective April 2023, Measure ULA layers a cliff transfer tax on residential property sales inside City of Los Angeles limits. 4% on the entire price for sales at or above the current lower threshold ($5.3M, rising to $5.4M July 1, 2026); 5.5% on the entire price for sales at or above the upper threshold ($10.6M, rising to $10.9M July 1, 2026). It’s the largest single municipal transfer tax in any HNW US market we model, and the cliff structure makes pricing strategy non-trivial.
How the cliff math works.
The defining feature of Measure ULA is that it applies to the entire sale price, not just the amount above the threshold. This is the “cliff” structure — and it produces wild discontinuities at the boundary:
- $5,290,000 sale: Measure ULA = $0
- $5,300,000 sale: Measure ULA = $212,000
- $5,310,000 sale: Measure ULA = $212,400
- $10,590,000 sale: Measure ULA = $423,600 (at 4% rate)
- $10,610,000 sale: Measure ULA = $583,550 (at 5.5% rate — jump of $160K)
An additional $10,000 of price at the $5.3M cliff edge triggers $212K of tax. An additional $20,000 at the $10.6M edge triggers $160K of incremental tax. These cliff effects dominate pricing strategy on listings near the boundaries.
The CPI adjustment mechanics
LAMC §21.9.2(D) adjusts the thresholds annually for inflation. The adjustment takes effect July 1 each year based on the prior calendar year’s CPI:
- April 2023 (initial): $5M / $10M
- July 1, 2024: $5.15M / $10.3M
- July 1, 2025: $5.3M / $10.6M (current through June 30, 2026)
- July 1, 2026: $5.4M / $10.9M
The annual reset means listings near a cliff in June face a meaningfully different math than the same listing in July. Sellers near the cliff have a structural reason to delay (or accelerate) closing relative to July 1.
Pricing strategy at cliff edges.
The seller’s dilemma
A property a seller’s broker would price at $5.4M is almost always better priced at $5.29M. The reasoning:
- $5.29M list: no Measure ULA. Seller keeps ~$4.97M after broker + closing.
- $5.40M list: $216K Measure ULA. Seller keeps ~$4.86M after Measure ULA + broker + closing.
- Delta: seller takes home ~$110K less on the higher price.
Unless the seller can credibly clear the cliff by meaningfully more (say $5.55M+ to come out ahead net of ULA), the cliff-edge price is functionally a ceiling. Pricing strategy at $5.4M, $5.45M, $5.5M is almost always a losing strategy.
The buyer’s position
Buyers know the seller’s math. A buyer offering $5.4M on a property listed at $5.4M effectively asks the seller to absorb $216K of tax — which the seller will counter by asking the buyer to pay it. The negotiating landing typically falls one of two ways:
- Negotiate down to $5.29M to avoid the cliff entirely
- Negotiate up to $5.55M+ to make the higher price economically rational for the seller
The $5.30M-$5.50M zone is structurally illiquid — neither side benefits from a price in that range.
The trophy-tier dynamic at $10.6M
The same mechanics at the upper cliff are even harsher because the rate jump (from 4% to 5.5%) is incremental on top of an already-applied ULA. A $10.5M sale carries $420K in ULA; a $10.7M sale carries $588K — a $168K incremental tax for $200K of extra price. Negotiating landings cluster at $10.45M and $10.85M+.
How to avoid Measure ULA entirely.
Buy in a non-LA-city municipality
Measure ULA applies only inside City of Los Angeles limits. Beverly Hills, Malibu, Santa Monica (Measure GS applies separately), Culver City (Measure RE applies separately), West Hollywood, and unincorporated LA County all sit outside ULA jurisdiction.
For trophy buyers, Beverly Hills is the obvious alternative. A $20M Beverly Hills purchase carries ~$22K in transfer tax (LA County 0.11% only); the same dollar inside City of LA carries ~$1.1M (LA County 0.11% + LA City 0.45% + Measure ULA 5.5%). The municipal-boundary decision is the single most consequential structuring call on a trophy LA purchase.
Statutory exemptions (limited)
LAMC §21.9.7 lists exemptions to Measure ULA:
- Transfers to qualified affordable-housing entities
- Transfers to government entities
- Transfers to certain qualifying nonprofits with religious or charitable purposes
- Transfers under certain consent decree structures
None of these are usable by a typical HNW buyer or seller. The exemptions exist to channel housing inventory toward affordable housing, not to give trophy buyers a workaround.
Timing relative to July 1
If a listing is priced just above the current cliff ($5.3M today, rising to $5.4M July 1, 2026), the seller can theoretically wait to close after July 1 to dodge ULA on the same dollar price. This requires holding through the period and timing the buyer’s closing — not always practical, but worth modeling.
Where the money goes.
Measure ULA proceeds fund the LA Affordable Housing and Homelessness Solutions Tax program. Per the LAMC, the revenue is allocated approximately:
- ~70% to affordable-housing construction and acquisition
- ~30% to homelessness prevention programs
In its first 18 months of operation, ULA collected approximately $480M in transfer tax. Critics note that the cliff structure has reduced the City of LA luxury-market transaction volume meaningfully (some estimates 25-40% fewer sales above $5.3M in 2024 vs 2022), which limits actual revenue collection. The structural debate is ongoing.
For your specific transaction.
- Run the LA seller calculator — model your specific price against the current ULA thresholds.
- Review the LA hub — Beverly Hills, Malibu, Santa Monica, Culver City all handled separately.
- Compare against Manhattan — the bicoastal calculus + ULA vs Manhattan mansion tax + RPTT comparison.
- Schedule a consultation if you’re pricing near a cliff — the pricing strategy conversation can shift the listing strategy meaningfully.
Pricing a City of LA listing near a Measure ULA cliff?
For sellers within ±$500K of the $5.3M or $10.6M cliffs, pricing strategy has 6- to 7-figure consequences. The consultation usually centers on cliff-edge pricing math, negotiation framework with the buyer, and timing relative to the July 1 CPI reset.
The Roebling Team at Compass executes transactions directly in Manhattan. For Los Angeles buyers and sellers, we collaborate with Compass agents in Los Angeles via referral — clients work with the best on-the-ground representation while keeping the analytical framework consistent across markets. This calculator is an informational research tool, not solicitation of representation.
For trans-market clients (Manhattan + Los Angeles portfolios) or to discuss your specific transaction, schedule a consultation. Where appropriate, we’ll introduce you to a vetted Compass agent in the local market.