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1. Home

1. Faq
2. Real Residential Or Commercial Property Transfer Tax And Measure ULA FAQ
   
   Real Residential Or Commercial Property Transfer Tax and Measure ULA FAQ
   
   Sales Price Calculate tax
   
   Tax Due
   
   Effective for deals closing after June 30, 2025, the brand-new limits for ULA will be $5,300,000 and $10,600,000. Transactions above $5,300,000 but under $10,600,000 will be assessed a 4% tax and transactions $10,600,000 and up will be evaluated a 5.5% tax.
   
   - Link to United to House LA (ULA) Dashboard (Los Angeles Housing Department).
   - Link to Source Data
   
   
   How typically is the City's genuine residential or commercial property transfer tax applied?
   
   The City's real residential or commercial property transfer tax is relevant on all files that communicate genuine residential or commercial property within the City, unlike residential or commercial property taxes which happen yearly. The real 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 computed on the consideration or value of the real residential or commercial property interest communicated.
   
   Does the City impose a real residential or commercial property transfer tax besides the special tax imposed under Measure ULA?
   
   Yes, the City imposes a genuine residential or commercial property transfer tax on all files that convey genuine residential or commercial property within the City. Today tax (" Base Tax") is calculated based on the factor to consider or value of the genuine residential or commercial property interest conveyed at a rate of 0.45%. The special tax under Measure ULA (" ULA Tax") imposes an extra tax on top of the Base Tax.
   
   What is Measure ULA and how does it work?
   
   Measure ULA developed the ULA Tax to money affordable housing tasks and provide resources to renters at threat of homelessness. The ULA Tax is troubled all files that communicate real 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 communicated exceeds a limit of five million dollars, or is ten million dollars or higher, respectively.
   
   What are the rate components 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, however 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 rounded up to the nearest $500 for the computation of the Base Tax. This does not apply to the ULA Rate computations, which are percentage-based.
   
   When did the ULA Tax enter into result?
   
   The ULA Tax applies to qualified conveyances of real residential or commercial property interests that happen on or after April 1, 2023.
   
   How will the City use the April 1 effective date of the ULA Tax?
   
   The City's procedure for applying the ULA Tax is modeled on the ownership modification guidelines under California Board of Equalization residential or commercial property tax guideline 462.260 for all files subject to the City's real residential or commercial property transfer tax. If a change of ownership happened before April 1 but is gotten by the county for tape-recording on or after April 1, 2023, the taxpayer will require to supply evidence of the actual deal date to reveal that it actually happened before the April 1, 2023 reliable date of the ULA Tax.
   
   Will the worth limits under the ULA Tax be changed yearly?
   
   Consistent with the Measure ULA, the value limits of when to use the ULA Tax and its corresponding rates are changed every year based upon the Bureau of Labor Statistics Chained Consumer Price Index.
   
   How will the City's genuine residential or commercial property transfer tax be applied to residential or commercial properties that are positioned partially within the limits of the City?
   
   The genuine residential or commercial property transfer tax will be used in proportion to the value of the real residential or commercial property interest that was transferred within the borders of the City. If an assessment of the genuine residential or commercial property interest isn't readily available, the real residential or commercial property transfer tax must be applied based upon the square footage of the residential or commercial property within the limits of the City, as a proportion of the overall factor to consider or value of the real residential or commercial property interest conveyed.
   
   How will the City deal with over payments or under payments of the genuine residential or commercial property transfer tax?
   
   If the City, through its compliance procedure, identifies 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 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 get a billing for the unpaid balance.
   
   Exist any exemptions for the ULA Tax?
   
   Yes, Measure ULA does supply exemptions for the ULA Tax. The ULA Tax will be not apply on files that convey real residential or commercial property within the City of Los Angeles if the transferee is described 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 section 501( c)( 3) with a history of budget-friendly housing advancement and/or inexpensive housing residential or commercial property management experience.
   - A Neighborhood Land Trust, or Limited-Equity Housing Cooperative that has a history of cost effective housing development and/or economical housing residential or commercial property management experience.
   - A limited partnership or restricted liability business where an acknowledged 501( c)( 3) nonprofit corporation, neighborhood 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 development and/or budget-friendly housing residential or commercial property management experience, or such minimal partnership or restricted liability business includes a partner or member, respectively, that has a history of budget-friendly housing advancement and/or inexpensive housing residential or commercial property management experience.
   - A community land trust or limited-equity housing cooperative partnering with a knowledgeable non-profit company.
   - A neighborhood land trust or limited-equity housing cooperative that does not show a history of affordable housing advancement and/ or inexpensive housing residential or commercial property management experience which tapes a cost covenant, constant with area 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 ask 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 received its initial IRS determination letter classification letter at least ten years prior to the deal and has assets of less than $1 billion.
   - The United States or any firm or instrumentality thereof, any state or territory, or political neighborhood thereof, or any other federal, state or regional public firm or public entity.
   - Any entity or firm exempt from the City's taxation 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 guidelines.
   The Office of Finance administers demands for ULA tax exemptions under LAMC Section 21.9.15. To request a determination of an entity's exemption from the ULA under 21.9.15( a), please send the following documents and details to finance.ula@lacity.org.
   
   - Power of Attorney.
   - Legal name.
   - Mailing address.
   - IRS 501 (c)( 3) determination letter showing the effective date of the exemption status.
   - Latest Form 990 or latest audited monetary declarations.
   Once the proper documentation has actually been provided and a decision of exemption has been made, the Office of Finance will offer a letter accrediting that transactions where the entity is the buyer/transferee are exempt from the tax. The letter is great for one year from the date of the letter.
   
   If a transaction has actually currently taken place and the tax was paid, but the buyer consequently believes it gets approved for an exemption, they will need to submit a refund claim utilizing the form noted above.
   
   Is the very same procedure used to determine 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 value of any lien or encumbrance staying thereon at the time of sale.) For the ULA Tax, it is calculated based on gross worth (including the worth of any lien or encumbrance remaining thereon at the time of sale.)
   
   If the buyer is presuming the seller's loan, is the assumed loan amount excluded from the value of the residential or commercial property communicated?
   
   For the Base Tax, it is calculated based upon net worth (unique of the assumed loan amount.) For the ULA Tax, it is computed based upon gross worth (including the assumed loan quantity.)
   
   If you have any questions relating to the ULA Tax, please contact finance.ula@lacity.org or (213) 635-7277.
   
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