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1. Faq
2. Real Residential Or Commercial Property Transfer Tax And Measure ULA FAQ
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   Real Residential Or Commercial Property Transfer Tax and Measure ULA FAQ
   
   List prices 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 however under $10,600,000 will be evaluated 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 frequently is the City's genuine residential or commercial property transfer tax used?
   
   The City's genuine residential or commercial property transfer tax is appropriate on all files that convey genuine residential or commercial property within the City, unlike residential or commercial property taxes which happen each year. The real residential or commercial property transfer tax is an excise tax on the benefit of offering a real residential or commercial property interest, not a tax on the residential or commercial property itself, and is computed on the factor to consider or value of the genuine residential or commercial property interest conveyed.
   
   Does the City enforce a real residential or commercial property transfer tax other than the special tax imposed under Measure ULA?
   
   Yes, the City imposes a genuine residential or commercial property transfer tax on all documents that communicate real residential or commercial property within the City. Today tax (" Base Tax") is calculated based upon the factor to consider or value of the real 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 money economical housing tasks and provide resources to renters at danger of homelessness. The ULA Tax is troubled all files that convey real residential or commercial property within the City of Los Angeles when the consideration or worth of the genuine residential or commercial property interest conveyed goes beyond a threshold of five million dollars, or is 10 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 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 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 single $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 calculation of the Base Tax. This does not apply to the ULA Rate computations, which are percentage-based.
   
   When did the ULA Tax go into effect?
   
   The ULA Tax applies to certified conveyances of real residential or commercial property interests that happen on or after April 1, 2023.
   
   How will the City use the April 1 reliable date of the ULA Tax?
   
   The City's treatment for using the ULA Tax is modeled on the ownership modification rules under California Board of Equalization residential or commercial property tax guideline 462.260 for all documents based on the City's genuine 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 need to offer evidence of the actual deal date to reveal that it actually occurred before the April 1, 2023 reliable date of the ULA Tax.
   
   Will the value thresholds under the ULA Tax be adjusted annually?
   
   Consistent with the Measure ULA, the value limits of when to apply the ULA Tax and its corresponding rates are changed yearly based upon the Bureau of Labor Statistics Chained Consumer Price Index.
   
   How will the City's real residential or commercial property transfer tax be used to residential or commercial properties that are situated partially within the borders of the City?
   
   The real 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 limits of the City. If an appraisal of the genuine residential or commercial property interest isn't available, the genuine residential or commercial property transfer tax need to be used based upon the square footage of the residential or commercial property within the limits of the City, as a percentage of the total consideration 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, determines a potential over payment or under payment, the City will alert the celebrations to the deal of the prospective overpayment or underpayment. In cases of overpayment, taxpayers will need to submit a request 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 an invoice for the unpaid balance.
   
   Are there any exemptions for the ULA Tax?
   
   Yes, Measure ULA does provide exemptions for the ULA Tax. The ULA Tax will be not be applicable on documents that communicate real residential or commercial property within the City of Los Angeles if the transferee is explained under recently included 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 cost effective housing advancement and/or budget-friendly housing residential or commercial property management experience.
   - A Neighborhood Land Trust, or Limited-Equity Housing Cooperative that has a history of budget-friendly housing development and/or economical housing residential or commercial property management experience.
   - A restricted partnership or limited 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) nonprofit corporation, community land trust, or limited-equity housing cooperative has a history of budget-friendly housing advancement and/or budget friendly housing residential or commercial property management experience, or such limited partnership or limited liability company includes a partner or member, respectively, that has a history of cost effective housing advancement and/or cost effective housing residential or commercial property management experience.
   - A neighborhood land trust or limited-equity housing cooperative partnering with a skilled non-profit organization.
   - A community land trust or limited-equity housing cooperative that does not demonstrate a history of affordable housing development and/ or budget friendly housing residential or commercial property management experience which tapes a cost covenant, constant 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 requests 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 possessions of less than $1 billion.
   - The United States or any agency or instrumentality thereof, any state or area, or political neighborhood thereof, or any other federal, state or regional public firm or public entity.
   - Any entity or company 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 regional, state, or federal laws and guidelines.
   The Office of Finance administers ask for ULA tax exemptions under LAMC Section 21.9.15. To ask for 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) decision letter showing the effective date of the exemption status.
   - Most recent Form 990 or latest audited monetary statements.
   Once the proper documents has been offered 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 benefits one year from the date of the letter.
   
   If a deal has actually already occurred and the tax was paid, however the purchaser consequently thinks it certifies for an exemption, they will need to file a refund claim utilizing the kind noted above.
   
   Is the same measure used to figure out the Base Tax and the ULA Tax?
   
   For the Base Tax, it is calculated based upon net worth of the residential or commercial property conveyed (special of the worth of any lien or encumbrance staying thereon at the time of sale.) For the ULA Tax, it is computed based upon gross value (consisting of 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 amount left out from the value of the residential or commercial property communicated?
   
   For the Base Tax, it is determined based upon net worth (unique of the presumed loan amount.) For the ULA Tax, it is computed based on gross value (consisting of the presumed loan quantity.)
   
   If you have any concerns concerning the ULA Tax, please contact finance.ula@lacity.org or (213) 635-7277.
   
   Office of Finance
   
   Office of Finance Special Desk Unit 200 North Spring Street, Room 101 Los Angeles, CA 90012
   
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