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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 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 examined a 4% tax and deals $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 often is the City's genuine residential or commercial property transfer tax applied?
   
   The City's real residential or commercial property transfer tax is applicable on all files that communicate genuine residential or commercial property within the City, unlike residential or commercial property taxes which take place every year. The real residential or commercial property transfer tax is an excise tax on the benefit of selling a real residential or commercial property interest, not a tax on the residential or commercial property itself, and is determined on the factor to consider or worth of the real residential or commercial property interest communicated.
   
   Does the City enforce a real residential or commercial property transfer tax aside from the special tax enforced under Measure ULA?
   
   Yes, the City enforces a real 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 consideration or worth of the genuine residential or commercial property interest communicated at a rate of 0.45%. The special 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 fund budget-friendly housing jobs and offer resources to occupants at danger 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 surpasses a threshold of 5 million dollars, or is ten million dollars or greater, respectively.
   
   What are the rate elements of the Base Tax and the ULA Tax under the City's genuine 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 communicated over $5,150,000, however under $10,300,000 and 2) 5.5% for residential or commercial properties conveyed 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 calculation of the Base Tax. This does not apply to the ULA Rate calculations, which are percentage-based.
   
   When did the ULA Tax enter into impact?
   
   The ULA Tax is suitable to certified conveyances of genuine residential or commercial property interests that occur on or after April 1, 2023.
   
   How will the City apply the April 1 effective 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 real residential or commercial property transfer tax. If a modification of ownership occurred before April 1 but is gotten by the county for recording on or after April 1, 2023, the taxpayer will require to offer proof of the actual transaction date to reveal that it really occurred before the April 1, 2023 efficient date of the ULA Tax.
   
   Will the worth limits under the ULA Tax be changed yearly?
   
   Consistent with the Measure ULA, the value thresholds of when to use 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 genuine residential or commercial property transfer tax be used to residential or commercial properties that are positioned partially within the limits of the City?
   
   The real residential or commercial property transfer tax will be used in percentage to the worth of the genuine residential or commercial property interest that was moved within the borders of the City. If an evaluation of the genuine residential or commercial property interest isn't readily available, the real residential or commercial property transfer tax ought to be used based upon the square video of the residential or commercial property within the limits of the City, as a percentage of the total 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 real 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 celebrations to the transaction of the potential overpayment or underpayment. In cases of overpayment, taxpayers will require 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 get an invoice for the unsettled balance.
   
   Are there any exemptions for the ULA Tax?
   
   Yes, Measure ULA does supply exemptions for the ULA Tax. The ULA Tax will be not apply on documents that communicate genuine residential or commercial property within the City of Los Angeles if the transferee is explained under recently added areas 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 affordable housing residential or commercial property management experience.
   - A Community Land Trust, or Limited-Equity Housing Cooperative that has a history of budget friendly housing advancement and/or cost effective housing residential or commercial property management experience.
   - A limited collaboration or limited liability business wherein an acknowledged 501( c)( 3) not-for-profit corporation, neighborhood land trust, or limited-equity housing cooperative is a general partner or managing member and such 501( c)( 3) not-for-profit corporation, community land trust, or limited-equity housing cooperative has a history of budget-friendly housing advancement and/or cost effective housing residential or commercial property management experience, or such minimal partnership or limited liability business includes a partner or member, respectively, that has a history of affordable housing development and/or cost effective housing residential or commercial property management experience.
   - A community land trust or limited-equity housing cooperative partnering with an experienced non-profit company.
   - A community land trust or limited-equity housing cooperative that does not show a history of budget friendly housing development and/ or budget friendly 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 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 decision letter designation letter at least ten years prior to the transaction and has assets of less than $1 billion.
   - The United States or any firm or instrumentality thereof, any state or area, or political neighborhood thereof, or any other federal, state or local public company or public entity.
   - Any entity or agency exempt from the City's tax power under the California or U.S. Constitutions.
   - All other deals which are exempt from the base Real Residential or commercial property Transfer Tax per local, state, or federal laws and policies.
   The Office of Finance administers demands 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 submit the following documents and info to finance.ula@lacity.org.
   
   - Power of Attorney.
   - Legal name.
   - Mailing address.
   - IRS 501 (c)( 3) determination letter showing the efficient date of the exemption status.
   - Most current Form 990 or most current audited financial statements.
   Once the suitable paperwork has been offered and a decision of exemption has been made, the Office of Finance will supply a letter accrediting that transactions where the entity is the buyer/transferee are exempt from the tax. The letter is excellent for one year from the date of the letter.
   
   If a deal has currently occurred and the tax was paid, however the buyer consequently thinks it gets approved for an exemption, they will require to file a refund claim utilizing the type kept in mind above.
   
   Is the same measure utilized to figure out the Base Tax and the ULA Tax?
   
   For the Base Tax, it is determined based upon net value of the residential or commercial property communicated (special of the worth of any lien or encumbrance remaining thereon at the time of sale.) For the ULA Tax, it is computed based on gross worth (consisting of the value of any lien or encumbrance remaining thereon at the time of sale.)
   
   If the buyer is assuming the seller's loan, is the assumed loan amount left out from the value of the residential or commercial property communicated?
   
   For the Base Tax, it is computed based on net value (unique of the presumed loan quantity.) For the ULA Tax, it is computed based upon gross value (including the presumed loan quantity.)
   
   If you have any questions regarding the ULA Tax, please contact finance.ula@lacity.org or (213) 635-7277.
   
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