“The homeless tax” in Los Angeles is actually two different taxes, levied by two different governments, hitting commercial property owners in two different ways. Conflating them leads to bad underwriting. Here is the 2026 picture.
Tax one: Measure ULA (City of Los Angeles transfer tax)
Measure ULA — the “Homelessness and Housing Solutions Tax,” often called the mansion tax — is a transfer tax on real estate sales inside City of Los Angeles limits, in effect since April 1, 2023 with no end date. Despite the nickname, it applies to commercial property exactly as it applies to residential. The seller pays, on the entire gross price — not the gain — and a 1031 exchange does not defer it. As of July 1, 2026, the inflation-adjusted thresholds are 4% above $5.4 million and 5.5% at $10.9 million and above. The city's ordinary base transfer tax still applies separately. Exemptions are narrow: qualified affordable-housing organizations, certain 501(c)(3) entities, and government agencies.
What ULA has actually done
The tax crossed $1 billion in cumulative revenue in January 2026 — roughly $1.2 billion over three years — below the original projections of $600 million to $1.1 billion per year. The market effect is measurable: UCLA researchers estimate the odds of a property selling above the threshold fell by as much as 55% after the tax took effect. Downtown, that shows up as a thin, stuck market just above the line and a distinctly more liquid one below it — the dynamic K2 covered in Commercial vs. multifamily after Measure ULA.
Where ULA stands politically in 2026
Two live fronts. In January 2026, the LA City Council rejected a proposal to put a rewrite of ULA on the June 2026 local ballot — so the tax stands as written. Statewide, an initiative backed by the Howard Jarvis Taxpayers Association is targeting the November 2026 ballot and could repeal or limit measures like ULA. Underwrite the tax as it exists; treat repeal as upside, never as a base case.
Tax two: Measure A (LA County sales tax)
Measure A, approved by county voters in November 2024, is a half-cent countywide sales tax for homelessness services and affordable housing. It took effect April 1, 2025, replacing the expiring quarter-cent Measure H, it is permanent, and it raises roughly $1 billion a year — more than 35% of it routed to the county's new affordable-housing agency. For a commercial owner, Measure A is not a property levy: it reaches you indirectly, through your retail tenants' registers and your own taxable purchases. It applies countywide — Culver City, Long Beach and Burbank included — while ULA stops at the City of LA boundary.
The strategic read for DTLA owners
Three practical conclusions. Assets that can trade below the $5.4M ULA threshold carry a structural liquidity advantage — going in and going out. Sellers near the line should price deliberately on one side of it, because a dollar over costs 4% of everything. And buyers should remember the threshold adjusts upward with inflation every July 1 — an asset bought just under today's line gains headroom over time. K2's current exclusive at 1048 S Los Angeles Street, offered at $4,950,000, is priced with exactly this arithmetic in mind.
Frequently asked
Does the LA 'mansion tax' apply to commercial property?
Yes. Measure ULA applies to all real property sales inside the City of Los Angeles above the threshold — commercial, industrial and residential alike. As of July 1, 2026: 4% above $5.4 million and 5.5% at $10.9 million and above, paid by the seller on the gross price.
Can a 1031 exchange avoid Measure ULA?
No. ULA is a transfer tax on the conveyance itself, not a capital-gains tax, so a 1031 exchange does not defer or reduce it.
What is the difference between Measure ULA and Measure A?
ULA is a City of Los Angeles transfer tax paid by sellers on high-value property sales. Measure A is a permanent half-cent LA County sales tax (effective April 1, 2025, replacing Measure H) funding homelessness services and affordable housing countywide. One taxes your sale; the other taxes retail transactions.
Could Measure ULA be repealed?
In January 2026 the LA City Council declined to put a rewrite on the June 2026 ballot, so the tax stands. A statewide initiative backed by the Howard Jarvis Taxpayers Association is targeting the November 2026 ballot and could limit or repeal such measures — but prudent underwriting treats ULA as permanent.
How much has Measure ULA raised?
Cumulative revenue passed $1 billion in January 2026 — roughly $1.2 billion over its first three years — below original projections of $600 million to $1.1 billion per year. UCLA research estimates the odds of a property trading above the threshold fell by as much as 55%.
Do these taxes apply outside the City of Los Angeles?
Measure ULA does not — Culver City, Burbank, Long Beach and other incorporated cities are outside it. Measure A's half-cent sales tax applies countywide.
This page is general information, not legal, tax or engineering advice. Confirm current requirements with the City of Los Angeles, LA County and your own counsel, CPA and structural engineer before acting.
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