Understanding Measure ULA: How LA's Transfer Tax Impacts Multifamily Investors

If you've followed the Los Angeles multifamily investment market over the past three years, you've likely heard about Measure ULA — sometimes called the "Mansion Tax." Since taking effect in April 2023, it has fundamentally altered the transaction landscape within the City of Los Angeles and created ripple effects across the broader metro.

What Measure ULA Does

Effective April 1, 2023, Measure ULA imposes a documentary transfer tax on real property sales within the City of Los Angeles:

• 4% tax on transactions between $5.15 million and $10.3 million
• 5.5% tax on transactions above $10.3 million

The seller is responsible for payment.

What It Doesn't Cover

This is critical: Measure ULA only applies within the City of Los Angeles. Separate incorporated cities — including Beverly Hills, West Hollywood, Pasadena, Glendale, Burbank, Santa Monica, Culver City, Long Beach, and every other independent municipality — are not subject to this tax.

Additionally, transfers to nonprofit organizations, affordable housing providers, and government entities are exempt.

Impact on the Market

The data is clear: Measure ULA has dampened transaction activity within the City of Los Angeles. Sales volume dropped sharply in 2023 and has not recovered to pre-measure levels.

A legal challenge to the measure was dismissed by the California Courts of Appeals in December 2025, making repeal through litigation unlikely in the near term.

Strategic Implications for Landlords

If you own property within the City of LA, Measure ULA changes the hold-or-sell calculus:

• Longer hold periods become more attractive
• 1031 exchanges remain viable but the higher transaction cost reduces net proceeds
• Properties just below the threshold may be strategically priced to stay under $5.15 million
• Investing outside city limits — in Pasadena, Glendale, Burbank, Alhambra, or other independent cities — avoids the tax entirely

How Helix Helps

Our team stays current on the regulatory landscape across every jurisdiction we serve.

Contact us to discuss your property's strategy.

Note: This article is for informational purposes only and does not constitute legal or tax advice.