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2. Real Residential Or Commercial Property Transfer Tax And Measure ULA FAQ
   
   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 but under $10,600,000 will be evaluated a 4% tax and deals $10,600,000 and up will be assessed 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 genuine residential or commercial property transfer tax applies on all documents that convey real residential or commercial property within the City, unlike residential or commercial property taxes which happen yearly. The genuine residential or commercial property transfer tax is an excise tax on the advantage of offering a real residential or commercial property interest, not a tax on the residential or commercial property itself, and is determined on the consideration or worth of the genuine residential or commercial property interest communicated.
   
   Does the City enforce a genuine residential or commercial property transfer tax aside from the unique tax imposed under Measure ULA?
   
   Yes, the City enforces a real residential or commercial property transfer tax on all files that communicate real residential or commercial property within the City. The present tax (" Base Tax") is calculated based upon the consideration or worth of the real residential or commercial property interest conveyed at a rate of 0.45%. The unique tax under Measure ULA (" ULA Tax") imposes an additional tax on top of the Base Tax.
   
   What is Measure ULA and how does it work?
   
   Measure ULA developed the ULA Tax to money budget friendly housing tasks and supply resources to tenants at risk of homelessness. The ULA Tax is enforced on all documents that communicate real residential or commercial property within the City of Los Angeles when the consideration or worth of the real residential or commercial property interest communicated goes beyond a threshold of 5 million dollars, or is 10 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 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, but under $10,300,000 and 2) 5.5% for residential or commercial properties communicated at $10,300,000 or more (" ULA Rates").
   - The specific language for the brand-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 $500 or fractional part thereof. A transfer in which the value of the residential or commercial property communicated is not divisible by $500 will be assembled to the nearby $500 for the computation of the Base Tax. This does not apply to the ULA Rate calculations, which are percentage-based.
   
   When did the ULA Tax enter into effect?
   
   The ULA Tax is relevant to certified conveyances of genuine residential or commercial property interests that happen on or after April 1, 2023.
   
   How will the City apply the April 1 efficient date of the ULA Tax?
   
   The City's procedure for applying the ULA Tax is designed on the ownership modification guidelines under California Board of Equalization residential or commercial property tax rule 462.260 for all documents based on the City's real residential or commercial property transfer tax. If a modification of ownership happened before April 1 but is gotten by the county for recording on or after April 1, 2023, the taxpayer will require to provide proof of the actual deal date to reveal that it actually took place before the April 1, 2023 effective date of the ULA Tax.
   
   Will the worth 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 changed annually based on the Bureau of Labor Statistics Chained Consumer Price Index.
   
   How will the City's genuine residential or commercial property transfer tax be used to residential or commercial properties that are positioned partly within the borders of the City?
   
   The genuine 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 assessment of the real residential or commercial property interest isn't readily available, the real residential or commercial property transfer tax need to be used based upon the square video footage of the residential or commercial property within the boundaries of the City, as a percentage of the total factor to consider or worth of the genuine residential or commercial property interest communicated.
   
   How will the City deal with over payments or under payments of the real residential or commercial property transfer tax?
   
   If the City, through its compliance process, recognizes a prospective over payment or under payment, the City will alert the parties to the transaction of the prospective overpayment or underpayment. In cases of overpayment, taxpayers will need 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 receive a billing for the unpaid balance.
   
   Are there any exemptions for the ULA Tax?
   
   Yes, Measure ULA does offer exemptions for the ULA Tax. The ULA Tax will be not apply on files that communicate real residential or commercial property within the City of Los Angeles if the transferee is explained under freshly 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 inexpensive housing development and/or affordable housing residential or commercial property management experience.
   - A Community Land Trust, or Limited-Equity Housing Cooperative that has a history of inexpensive housing advancement and/or affordable housing residential or commercial property management experience.
   - A minimal partnership or restricted liability company where an acknowledged 501( c)( 3) not-for-profit corporation, community land trust, or limited-equity housing cooperative is a basic 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 economical housing advancement and/or inexpensive housing residential or commercial property management experience, or such limited partnership or limited liability business consists of a partner or member, respectively, that has a history of economical housing development and/or budget friendly housing residential or commercial property management experience.
   - A neighborhood land trust or limited-equity housing cooperative partnering with an experienced non-profit organization.
   - A community land trust or limited-equity housing cooperative that does not demonstrate a history of affordable housing development and/ or economical housing residential or commercial property management experience which tapes a price 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
   
   - A recognized 501( c)( 3) entity which got its initial IRS determination letter designation letter a minimum of ten years prior to the transaction and has possessions of less than $1 billion.
   - The United States or any firm or instrumentality thereof, any state or area, or political subdivision thereof, or any other federal, state or local public agency 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 local, state, or federal laws and regulations.
   The Office of Finance administers ask for ULA tax exemptions under LAMC Section 21.9.15. To ask for a determination of an entity's exemption from the ULA under 21.9.15( a), please submit the following files and information to finance.ula@lacity.org.
   
   - Power of Attorney.
   - Legal name.
   - Mailing address.
   - IRS 501 (c)( 3) decision letter showing the effective date of the exemption status.
   - Most current Form 990 or newest audited monetary statements.
   Once the proper documents has been supplied and a decision of exemption has been made, the Office of Finance will provide a letter licensing that deals where the entity is the buyer/ are exempt from the tax. The letter is good for one year from the date of the letter.
   
   If a transaction has currently 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 kind noted above.
   
   Is the same procedure used to figure out the Base Tax and the ULA Tax?
   
   For the Base Tax, it is determined based on net value of the residential or commercial property communicated (unique of the worth of any lien or encumbrance remaining thereon at the time of sale.) For the ULA Tax, it is calculated based on gross value (including 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 left out from the worth of the residential or commercial property conveyed?
   
   For the Base Tax, it is calculated based on net value (unique of the assumed loan amount.) For the ULA Tax, it is determined based upon gross worth (consisting of the presumed loan amount.)
   
   If you have any concerns concerning the ULA Tax, please contact finance.ula@lacity.org or (213) 635-7277.
   
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