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1. Faq
2. Real Residential Or Commercial Property Transfer Tax And Measure ULA FAQ
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   Real Residential Or Commercial Property Transfer Tax and Measure ULA FAQ
   
   List prices Calculate tax
   
   Tax Due
   
   Effective for transactions closing after June 30, 2025, the brand-new thresholds for ULA will be $5,300,000 and $10,600,000. Transactions above $5,300,000 however under $10,600,000 will be evaluated a 4% tax and transactions $10,600,000 and up will be examined a 5.5% tax.
   
   - Link to United to House LA (ULA) Dashboard (Los Angeles Housing Department).
   - Link to Source Data
   
   
   How frequently is the City's genuine residential or commercial property transfer tax used?
   
   The City's genuine residential or commercial property transfer tax applies on all files that communicate genuine residential or commercial property within the City, unlike residential or commercial property taxes which occur yearly. The genuine residential or commercial property transfer tax is an excise tax on the benefit of selling a genuine residential or commercial property interest, not a tax on the residential or commercial property itself, and is calculated on the consideration or value of the real residential or commercial property interest conveyed.
   
   Does the City enforce a real residential or commercial property transfer tax besides the unique tax enforced under Measure ULA?
   
   Yes, the City imposes a genuine residential or commercial property transfer tax on all files that convey real residential or commercial property within the City. The present tax (" Base Tax") is calculated based on the factor to consider or value of the genuine residential or commercial property interest communicated at a rate of 0.45%. The unique 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 cost effective housing projects and offer resources to occupants at threat 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 ten million dollars or higher, respectively.
   
   What are the rate elements of the Base Tax and the ULA Tax under the City's real residential or commercial property transfer tax?
   
   The rate components 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 communicated over $5,150,000, but 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 found 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 single $500 or fractional part thereof. A transfer in which the worth of the residential or commercial property communicated is not divisible by $500 will be rounded up to the nearest $500 for the calculation of the Base Tax. This does not apply to the ULA Rate computations, which are percentage-based.
   
   When did the ULA Tax go into impact?
   
   The ULA Tax is applicable to certified conveyances of genuine residential or commercial property interests that happen on or after April 1, 2023.
   
   How will the City use the April 1 reliable date of the ULA Tax?
   
   The City's procedure for applying the ULA Tax is designed on the ownership change guidelines under California Board of Equalization residential or commercial property tax rule 462.260 for all documents subject to the City's genuine residential or commercial property transfer tax. If a modification of ownership took place before April 1 but is gotten by the county for recording on or after April 1, 2023, the taxpayer will require to offer evidence of the actual transaction date to show that it actually occurred before the April 1, 2023 effective date of the ULA Tax.
   
   Will the value limits under the ULA Tax be changed annually?
   
   Consistent with the Measure ULA, the value limits of when to apply the ULA Tax and its matching rates are adjusted every year based on 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 located partly within the limits of the City?
   
   The real residential or commercial property transfer tax will be applied in percentage to the value of the real residential or commercial property interest that was moved within the boundaries of the City. If an appraisal of the real residential or commercial property interest isn't available, the real residential or commercial property transfer tax need to 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 genuine residential or commercial property interest conveyed.
   
   How will the City handle over payments or under payments of the genuine residential or commercial property transfer tax?
   
   If the City, through its compliance procedure, recognizes a potential over payment or under payment, the City will alert the parties to the transaction of the potential overpayment or underpayment. In cases of overpayment, taxpayers will need to file a demand for refund from the Office of Finance. The Claim for Refund Application can be discovered here:
   
   https://finance.lacity.gov/sites/g/files/wph1721/files/2021-04/refundclaim%20%281%29.pdf
   
   In case of underpayment, the taxpayer will receive a billing for the unpaid balance.
   
   Exist any exemptions for the ULA Tax?
   
   Yes, Measure ULA does provide exemptions for the ULA Tax. The ULA Tax will be not be relevant on files that communicate real residential or commercial property within the City of Los Angeles if the transferee is explained under recently included 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 area 501( c)( 3) with a history of affordable housing advancement and/or budget-friendly housing residential or commercial property management experience.
   - A Community Land Trust, or Limited-Equity Housing Cooperative that has a history of budget-friendly housing development and/or inexpensive housing residential or commercial property management experience.
   - A restricted collaboration or limited liability company wherein 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, community land trust, or limited-equity housing cooperative has a history of inexpensive housing development and/or cost effective housing residential or commercial property management experience, or such restricted partnership or restricted liability business includes a partner or member, respectively, that has a history of inexpensive housing development and/or economical housing residential or commercial property management experience.
   - A neighborhood land trust or limited-equity housing cooperative partnering with an experienced non-profit company.
   - A neighborhood land trust or limited-equity housing cooperative that does not show a history of economical housing advancement and/ or inexpensive housing residential or commercial property management experience which tapes an affordability covenant, consistent with section 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 demands 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 decision letter classification letter at least 10 years prior to the deal and has properties of less than $1 billion.
   - The United States or any company or instrumentality thereof, any state or territory, or political neighborhood thereof, or any other federal, state or regional public company or public entity.
   - Any entity or firm exempt from the City's tax 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 .
   The Office of Finance administers ask for ULA tax exemptions under LAMC Section 21.9.15. To request 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.
   - Most recent Form 990 or latest audited monetary declarations.
   Once the appropriate documents has been offered and a determination of exemption has been made, the Office of Finance will provide a letter licensing that transactions 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, but the buyer consequently thinks it gets approved for an exemption, they will need to submit a refund claim using the type kept in mind above.
   
   Is the very same measure utilized to identify the Base Tax and the ULA Tax?
   
   For the Base Tax, it is determined based upon net worth of the residential or commercial property communicated (unique of the value of any lien or encumbrance remaining thereon at the time of sale.) For the ULA Tax, it is computed based upon gross value (consisting of the worth of any lien or encumbrance staying thereon at the time of sale.)
   
   If the purchaser is assuming the seller's loan, is the assumed loan quantity excluded from the value of the residential or commercial property communicated?
   
   For the Base Tax, it is determined based on net value (special of the assumed loan amount.) For the ULA Tax, it is computed based upon gross worth (including the presumed loan amount.)
   
   If you have any concerns regarding the ULA Tax, please contact finance.ula@lacity.org or (213) 635-7277.
   
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