Updated August 16, 2026
Yes. Measure ULA is a transfer tax on the gross sale price, not a tax on profit, so it applies whether you made money, broke even, or lost money on the building. If the consideration lands between $5,400,000 and $10,899,999, the additional tax is 4.0% of the entire price. At $10,900,000 or above it is 5.5% of the entire price. Nothing about your basis, your loan balance, your accumulated depreciation, or your gain enters the calculation. This is the single most misunderstood feature of the tax, and it produces the most painful surprises — an owner who bought at the top of the last cycle and is selling for less than they paid still writes a seven-figure check to the City on a large enough building.
It is a documentary transfer tax, layered on top of the existing city and county transfer taxes. Not an income tax, not a capital gains tax.
The base is gross consideration. The whole price, from the first dollar — not just the amount above the threshold.
It is a cliff, not a bracket. A sale at $5,399,000 owes no ULA. A sale at $5,400,000 owes 4.0% of $5,400,000, which is $216,000. Roughly a thousand dollars more in price costs more than two hundred thousand dollars in tax.
The thresholds adjust annually. They started at $5,000,000 and $10,000,000 in April 2023 and have moved with Chained CPI since. Always confirm the figures in force at your closing date rather than relying on a number from an article.
It applies inside the City of Los Angeles only. Buildings in Santa Monica, Beverly Hills, Culver City, West Hollywood, Burbank, Glendale, Pasadena, and unincorporated county areas are outside it, though several of those cities have transfer taxes of their own.
Because the tax applies to the whole price rather than the amount over the threshold, the price band immediately above each threshold is economically dead. A seller is strictly better off at $5,399,000 than at any price up to roughly $5,616,000, because ULA consumes the difference.
That has a practical consequence in how a building gets marketed. If your building's honest value sits near a threshold, the pricing decision is not a rounding exercise — it determines whether a quarter of a million dollars leaves the transaction. This is a conversation to have before the offering package is written, not after offers arrive.
A 1031 exchange does not exempt the sale. The exchange defers federal and state income tax on the gain. ULA is a transfer tax on the conveyance, and the conveyance still happens. Sellers conflate these constantly and it is an expensive conflation.
Selling at a loss does not exempt the sale. As above — there is no gain test anywhere in the calculation.
A distressed sale does not automatically exempt the sale. Certain transfers, including some involving qualifying affordable housing organizations and certain government entities, have exemptions written into the measure. Foreclosure and lender-related transfers have their own treatment. None of this is a general hardship exemption, and any specific claim needs to be run by counsel against the current rules rather than assumed.
Price deliberately around the thresholds. Sometimes that means marketing below a threshold and accepting the ceiling that implies. Sometimes the building's real value is far enough above the threshold that the tax is simply a cost of the transaction.
Model it into the net proceeds early. ULA belongs in the seller's net sheet from the first conversation, alongside the county and city base transfer taxes, commission, and payoff. Owners who see it for the first time in escrow make worse decisions.
Consider whether time changes anything. The thresholds move annually with inflation. On a building sitting just above a threshold, a later sale year can put it below — though that has to be weighed against everything else moving in the market.
Get real advice on structure. There are legitimate structural questions here — entity-level transfers, partial interests, timing — and they interact with rules designed to catch avoidance, including how legal-entity ownership changes are treated for transfer tax purposes. That is a conversation for a transactional attorney and a CPA who work in Los Angeles, and it should happen before a listing, not after an offer.
Measure ULA is indifferent to whether you made money. Build it into your net proceeds analysis at the very start, know exactly where the current thresholds sit on your closing date, and treat the price band just above each threshold as territory to avoid. On a building near the line, the pricing strategy is worth more than any other single decision in the sale.
Does a 1031 exchange avoid Measure ULA?
No. The exchange defers income tax on the gain; ULA taxes the transfer itself. Both a straight sale and an exchange convey the property, and the transfer tax attaches to the conveyance.
Is Measure ULA still being litigated?
The measure survived its principal legal challenge — a December 2025 California Court of Appeal decision affirmed against the challengers. Owners should plan on it applying rather than on it being struck down.
Who pays it, the buyer or the seller?
Custom in Los Angeles puts the transfer tax on the seller, and that is how most deals are written. It is technically negotiable, and on some transactions the parties do split or shift it — but a buyer asked to absorb 4% or 5.5% will simply reduce their price by roughly the same amount.
Michael Sterman is Senior Managing Director Investments at Marcus & Millichap.
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