By Bobak Kalhor, President, K2 Investment, Inc. — CA DRE #01198998 · Corporate DRE #01201662 — September 2026
For a commercial sale in the City of Los Angeles closing after June 30, 2026, Measure ULA takes 4 percent of the entire price once the price is over $5,400,000, and 5.5 percent once it reaches $10,900,000. Because the tax applies to the whole price and not just the part above the line, there are two price ranges where a higher sale price leaves the seller with less money: roughly $5,400,000 to $5,626,000, and $10,900,000 to $11,074,000.
This is the reference page. It covers the rates, the thresholds by year, who pays, what is exempt, and the arithmetic of the dead zones. What the tax has done to the market is a separate study: The $5.4 Million Wall, which found that City of Los Angeles buildings now sell just under the threshold nearly four times as often as just over it.
What is Measure ULA?
Measure ULA is a City of Los Angeles real property transfer tax, approved by voters in November 2022 and in effect for transfers on or after April 1, 2023. It is often called the mansion tax, but it applies to every kind of real property inside the city, including warehouses, retail, office and apartment buildings. It is collected in addition to the ordinary city transfer tax of 0.45 percent and the county transfer tax of 0.11 percent.
What are the Measure ULA rates and thresholds in 2026?
| In effect from | 4% tier begins over | 5.5% tier begins at |
|---|---|---|
| April 1, 2023 | $5,000,000 | $10,000,000 |
| July 1, 2024 | $5,150,000 | $10,300,000 |
| July 1, 2025 | $5,300,000 | $10,600,000 |
| July 1, 2026 | $5,400,000 | $10,900,000 |
Measure ULA thresholds by effective date. Adjusted each July 1 by chained CPI. Source: Los Angeles Office of Finance.
Three details matter more than the rates.
- It is not marginal. A $5,500,000 sale does not pay 4 percent on the $100,000 above the line. It pays 4 percent on all $5,500,000, which is $220,000.
- It is on gross value. The ULA portion is calculated on the full consideration including any debt the buyer assumes. The ordinary city base tax, by contrast, is on the value net of liens.
- The 4 percent tier starts when the price is over the threshold, not at it. A sale at exactly $5,400,000 pays no ULA. A sale at $5,400,001 pays $216,000. The 5.5 percent tier starts at the threshold itself: $10,900,000 pays 5.5 percent.
Who pays Measure ULA, the buyer or the seller?
Legally either party can be held liable, but in Los Angeles practice the seller pays, and purchase agreements almost always say so. The tax is due when the deed records. Escrow collects it and remits it to the city.
What is exempt from Measure ULA?
Very little. The exemptions cover qualified affordable housing organizations, certain nonprofits meeting specific criteria, and government entities. There is no exemption for commercial property, for owner-occupied property, for long-held property, or for sellers who are individuals rather than companies. A proposed exemption for new construction was blocked by the City Council in July 2026.
Why is there a dead zone, and where is it?
Because the tax applies to the whole price the moment the price crosses the line, the seller's net proceeds drop by more than $216,000 in a single dollar of price. It then takes a substantial further increase in price before the seller catches back up to where they would have been selling at the line.
| Sale price | Measure ULA | Ordinary transfer tax | Seller nets |
|---|---|---|---|
| $5,000,000 | $0 | $28,000 | $4,972,000 |
| $5,400,000 | $0 | $30,240 | $5,369,760 |
| $5,450,000 | $218,000 | $30,520 | $5,201,480 |
| $5,500,000 | $220,000 | $30,800 | $5,249,200 |
| $5,600,000 | $224,000 | $31,360 | $5,344,640 |
| $5,750,000 | $230,000 | $32,200 | $5,487,800 |
| $6,000,000 | $240,000 | $33,600 | $5,726,400 |
Illustrative seller net proceeds at selected prices, 2026 thresholds, before commissions and other closing costs. Shaded rows net less than the row above them.
Every price between $5,400,001 and about $5,626,000 nets the seller less than $5,369,760, which is what a sale at exactly $5,400,000 nets. That is the first dead zone. The second sits between $10,900,000 and about $11,074,000, where the jump from 4 percent to 5.5 percent costs more than the extra price brings in. A $10,899,999 sale nets roughly $10,403,000; a $10,900,000 sale nets roughly $10,239,000; the seller does not get back to $10,403,000 until the price passes about $11,074,000.
The dead zones move every July 1 with the thresholds. The width of the first one is always about 4.2 percent of the threshold, so at $5,400,000 it runs about $226,000.
Does Measure ULA apply to my property?
Only if the parcel is inside the City of Los Angeles, which is a jurisdiction boundary and not a mailing address. East Los Angeles and Florence-Firestone carry Los Angeles addresses and are unincorporated county, outside the tax. Some properties with Marina del Rey, West Hollywood, Culver City, Gardena or Torrance addresses are inside the city. North Hollywood, Van Nuys, San Pedro, Venice, Woodland Hills and about thirty other neighborhood names are all inside the city. Check the parcel against Los Angeles County Assessor records, not the envelope. Santa Monica, Culver City, Pomona and Redondo Beach have their own city transfer taxes with different rates.
Run the numbers on your building
If you own commercial property in Los Angeles County and want to know which side of the line your parcel is on and what the net looks like at a current valuation, send us the address. We will check the parcel against the assessor's records, run the numbers, and send back the answer. One reply from a person.
Bobak Kalhor, K2 Investment, Inc. | (213) 624-0490 | bk@k2investments.com
530 E. 8th Street, Suite 400, Los Angeles, CA 90014 | DRE #01198998 | Corp. DRE #01201662
Related: The $5.4 Million Wall: what Measure ULA did to Los Angeles commercial sales | Downtown LA commercial real estate market report | Homelessness taxes and LA commercial property | Current Downtown Los Angeles listings
Sources, assumptions and disclaimer
Sources
Los Angeles Office of Finance, Real Property Transfer Tax and Measure ULA FAQ (rates, 2026 thresholds, gross versus net basis, exemption categories). Los Angeles Municipal Code sections 21.9.2, 21.9.14 and 21.9.15. 2024 and 2025 thresholds as published by the Office of Finance and reported by the Apartment Association of Greater Los Angeles and Hanson Bridgett LLP. Chained CPI adjustment mechanism per the ordinance.
Assumptions in the worked numbers
Ordinary transfer tax taken as 0.56 percent of price (city 0.45 percent plus county 0.11 percent) with no assumed debt, so gross and net value are equal. Commissions, prorations, title, escrow and other closing costs are excluded. Break-even prices: $5,400,000 times (1 - 0.0056) divided by (1 - 0.04 - 0.0056) equals $5,626,320; $10,899,999 times (1 - 0.0456) divided by (1 - 0.0606) equals $11,074,046.
Disclaimer
Published September 2026. This is general information from a licensed California real estate broker. It is not tax advice, legal advice or an opinion of value, and nothing in it should be read as guidance on how to structure a transaction. Rates, thresholds and exemptions change; the thresholds shown adjust every July 1. Confirm your own situation with your CPA, your counsel and the Los Angeles Office of Finance before acting.