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1. Home

1. Faq
2. Real Residential Or Commercial Property Transfer Tax And Measure ULA FAQ
   
   Real Residential Or Commercial Property Transfer Tax and Measure ULA FAQ
   
   Sales Price Calculate tax
   
   Tax Due
   
   Effective for deals closing after June 30, 2025, the new limits for ULA will be $5,300,000 and $10,600,000. Transactions above $5,300,000 but under $10,600,000 will be evaluated a 4% tax and deals $10,600,000 and up will be evaluated a 5.5% tax.
   
   - Link to United to House LA (ULA) Dashboard (Los Angeles Housing Department).
   - Link to Source Data
   
   
   How often is the City's genuine residential or commercial property transfer tax used?
   
   The City's real residential or commercial property transfer tax applies on all documents that communicate real residential or commercial property within the City, unlike residential or commercial property taxes which occur every year. The real residential or commercial property transfer tax is an excise tax on the benefit of offering a genuine residential or commercial property interest, not a tax on the residential or commercial property itself, and is calculated on the factor to consider or value of the genuine residential or commercial property interest communicated.
   
   Does the City enforce a real residential or commercial property transfer tax besides the special tax imposed under Measure ULA?
   
   Yes, the City enforces a genuine residential or commercial property transfer tax on all files that communicate real residential or commercial property within the City. Today tax (" Base Tax") is computed based upon the consideration or worth of the real residential or commercial property interest conveyed at a rate of 0.45%. The special tax under Measure ULA (" ULA Tax") enforces an extra tax on top of the Base Tax.
   
   What is Measure ULA and how does it work?
   
   Measure ULA established the ULA Tax to money affordable housing projects and supply resources to occupants at danger of homelessness. The ULA Tax is troubled all documents that convey genuine residential or commercial property within the City of Los Angeles when the factor to consider or value of the real residential or commercial property interest conveyed surpasses a limit of 5 million dollars, or is 10 million dollars or greater, respectively.
   
   What are the rate components of the Base Tax and the ULA Tax under the City's genuine residential or commercial property transfer tax?
   
   The rate elements are as follows:
   
   - The Base Tax rate of $2.25 per $500 or part thereof (" Base Rate").
   - The ULA Tax rates of, 1) 4% for residential or commercial properties conveyed over $5,150,000, however under $10,300,000 and 2) 5.5% for residential or commercial properties conveyed at $10,300,000 or more (" ULA Rates").
   - The particular language for the new rates can be discovered here: https://clkrep.lacity.org/onlinedocs/2022/22-1100-S2_ord_187692_1-1-23.pdf.
   - The chart below is summary of the rates:.
   
3. Note: the City's Base Rate is $2.25 for every $500 or part thereof. A transfer in which the value of the residential or commercial property communicated is not divisible by $500 will be rounded up to the nearest $500 for the computation of the Base Tax. This does not use to the ULA Rate calculations, which are percentage-based.
   
   When did the ULA Tax go into impact?
   
   The ULA Tax applies to qualified conveyances of real residential or commercial property interests that take place on or after April 1, 2023.
   
   How will the City use the April 1 efficient date of the ULA Tax?
   
   The City's treatment for using the ULA Tax is modeled on the ownership change guidelines under California Board of Equalization residential or commercial property tax rule 462.260 for all files based on the City's genuine residential or commercial property transfer tax. If a change of ownership happened before April 1 however is received by the county for taping on or after April 1, 2023, the taxpayer will require to offer proof of the actual transaction date to show that it in fact took place before the April 1, 2023 reliable date of the ULA Tax.
   
   Will the value thresholds under the ULA Tax be adjusted yearly?
   
   Consistent with the Measure ULA, the value limits of when to apply the ULA Tax and its corresponding rates are changed each year based upon the Bureau of Labor Statistics Chained Consumer Price Index.
   
   How will the City's real residential or commercial property transfer tax be applied to residential or commercial properties that are situated partially within the borders of the City?
   
   The real residential or commercial property transfer tax will be applied in proportion to the value of the genuine residential or commercial property interest that was moved within the borders of the City. If an evaluation of the genuine residential or commercial property interest isn't readily available, the real residential or commercial property transfer tax must be used based upon the square footage of the residential or commercial property within the borders of the City, as a proportion of the overall consideration or worth of the real residential or commercial property interest communicated.
   
   How will the City deal with over payments or under payments of the genuine residential or commercial property transfer tax?
   
   If the City, through its compliance procedure, recognizes a prospective over payment or under payment, the City will alert the celebrations to the deal of the possible overpayment or underpayment. In cases of overpayment, taxpayers will require to submit an ask for refund from the Office of Finance. The Claim for Refund Application can be found here:
   
   https://finance.lacity.gov/sites/g/files/wph1721/files/2021-04/refundclaim%20%281%29.pdf
   
   In case of underpayment, the taxpayer will get a billing for the unpaid balance.
   
   Exist any exemptions for the ULA Tax?
   
   Yes, Measure ULA does supply exemptions for the ULA Tax. The ULA Tax will be not be suitable on documents that communicate genuine residential or commercial property within the City of Los Angeles if the transferee is explained under freshly added sections 21.9.14 and 21.9.15 of the Los Angeles Municipal Code (" LAMC"). The transferee descriptions are as follows:
   
   Qualified Affordable Housing Organizations under LAMC Section 21.9.14
   
   - A non-profit entity within Internal Revenue Code section 501( c)( 3) with a history of inexpensive housing advancement and/or budget-friendly housing residential or commercial property management experience.
   - A Neighborhood Land Trust, or Limited-Equity Housing Cooperative that has a history of affordable housing development and/or budget friendly housing residential or commercial property management experience.
   - A limited collaboration or restricted liability business where a recognized 501( c)( 3) not-for-profit corporation, community land trust, or limited-equity housing cooperative is a general partner or handling member and such 501( c)( 3) not-for-profit corporation, neighborhood land trust, or limited-equity housing cooperative has a history of budget friendly housing advancement and/or budget-friendly housing residential or commercial property management experience, or such limited collaboration or restricted liability company includes a partner or member, respectively, that has a history of cost effective housing advancement and/or economical housing residential or commercial property management experience.
   - A neighborhood land trust or limited-equity housing cooperative partnering with a skilled non-profit company.
   - A community land trust or limited-equity housing cooperative that does not show a history of budget friendly housing advancement and/ or affordable housing residential or commercial property management experience which tape-records a price covenant, constant with area 22.618.3( d)( 1 )( i). b. of the Los Angeles Administrative Code, on the residential or commercial property at the time of the acquisition.
   The Los Angeles Housing Department administers requests for ULA tax exemptions under LAMC Section 21.9.14.
   
   Other Exemptions under LAMC Section 21.9.15
   
   - An acknowledged 501( c)( 3) entity which got its initial IRS determination letter designation letter at least ten years prior to the transaction and has properties of less than $1 billion.
   - The United States or any company or instrumentality thereof, any state or territory, or political subdivision thereof, or any other federal, state or local public firm or public entity.
   - Any entity or firm exempt from the City's taxation power under the California or U.S. Constitutions.
   - All other transactions which are exempt from the base Real Residential or commercial property Transfer Tax per regional, state, or federal laws and guidelines.
   The Office of Finance administers requests for ULA tax exemptions under LAMC Section 21.9.15. To ask for a decision of an entity's exemption from the ULA under 21.9.15( a), please send the following documents and info to finance.ula@lacity.org.
   
   - Power of Attorney.
   - Legal name.
   - Mailing address.
   - IRS 501 (c)( 3) determination letter revealing the effective date of the exemption status.
   - Latest Form 990 or newest audited financial declarations.
   Once the suitable documentation has been offered and a decision of exemption has been made, the Office of Finance will offer a letter licensing that deals where the entity is the buyer/transferee are exempt from the tax. The letter benefits one year from the date of the letter.
   
   If a deal has already happened and the tax was paid, however the purchaser subsequently thinks it receives an exemption, they will need to submit a refund claim using the type kept in mind above.
   
   Is the same procedure used to determine the Base Tax and the ULA Tax?
   
   For the Base Tax, it is computed based on net worth of the residential or commercial property conveyed (unique of the worth of any lien or encumbrance remaining thereon at the time of sale.) For the ULA Tax, it is calculated based upon gross value (including the worth of any lien or encumbrance remaining thereon at the time of sale.)
   
   If the buyer is presuming the seller's loan, is the assumed loan amount left out from the value of the residential or commercial property communicated?
   
   For the Base Tax, it is computed based on net worth (exclusive of the presumed loan amount.) For the ULA Tax, it is computed based upon gross value (consisting of the assumed loan quantity.)
   
   If you have any concerns regarding the ULA Tax, please contact finance.ula@lacity.org or (213) 635-7277.
   
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